2014 BMW Group Annual Report PDF

ANNUAL REPORT
2014
innovative
successful
sustainable
proﬁtable
forward-looking
Contents
3 BMW GROUP IN FIGURES
6 REPORT OF THE SUPERVISORY BOARD
14 STATEMENT OF THE CHAIRMAN OF THE

BOARD OF MANAGEMENT
18 COMBINED MANAGEMENT REPORT

18 General Information on the BMW Group
18 Business Model
20 Management System
23 Report on Economic Position
23 General and Sector-specific Environment
26 Overall Assessment by Management
26 Financial and Non-financial Performance Indicators
29 Review of Operations
49 Results of Operations, Financial Position and
Net Assets
61 Comments on Financial Statements of BMW AG
64 Events after the End of the Reporting Period
65 Report on Outlook, Risks and Opportunities
65 Outlook
70 Report on Risks and Opportunities
82 Internal Control System and Risk Management System
Relevant for the Consolidated Financial Reporting
Process
83 Disclosures Relevant for Takeovers
87 BMW Stock and Capital Markets in 2014
90 GROUP FINANCIAL STATEMENTS

90 Income Statements for Group and Segments
90 Statement of Comprehensive Income for Group
92 Balance Sheets for Group and Segments
94 Cash Flow Statements for Group and Segments
96 Group Statement of Changes in Equity
98 Notes to the Group Financial Statements
98 Accounting Principles and Policies
116 Notes to the Income Statement
123 Notes to the Statement of
Comprehensive Income
124 Notes to the Balance Sheet
149 Other Disclosures
165 Segment Information
170 STATEMENT ON CORPORATE GOVERNANCE (§ 289 a HGB)

(Part of the Combined Management Report)
170 Information on the Company’s Governing Constitution
171 Declaration of the Board of Management
and of the Supervisory Board pursuant to § 161 AktG
172 Members of the Board of Management
173 Members of the Supervisory Board
176 Composition and Work Procedures of the Board of
Management of BMW AG and its Committees
178 Composition and Work Procedures of the Supervisory Board
of BMW AG and its Committees
183 Information on Corporate Governance Practices
Applied beyond Mandatory Requirements
184 Compliance in the BMW Group
189 Compensation Report
198 Responsibility Statement by the

Company’s Legal Representatives
199 Auditor’s Report
200 OTHER INFORMATION

200 BMW Group Ten-year Comparison
202 BMW Group Locations
204 Glossary
206 Index
208 Financial Calendar
209 Contacts
3
BMW Group in figures
2010 2011 2012 2013 2014 Change in %
Principal non-financial performance indicators

BMW Group
Workforce at end of year 1 95,453 100,306 105,876 110,351 116,324 5.4
Automotive segment
Sales volume 2 1,461,166 1,668,982 1,845,186 1,963,798 2,117,965 7.9
Fleet emissions in g CO2 / km 3 148 145 143 133 130 – 2.3
Motorcycles segment
Sales volume 4 98,047 104,286 106,358 115,215 123,495 7.2
Further non-financial key performance figures

Automotive segment
Sales volume
BMW 2 1,224,280 1,380,384 1,540,085 1,655,138 1,811,719 9.5
MINI 234,175 285,060 301,526 305,030 302,183 – 0.9
Rolls-Royce 2,711 3,538 3,575 3,630 4,063 11.9
Total 2 1,461,166 1,668,982 1,845,186 1,963,798 2,117,965 7.9
Production volume
BMW 5 1,236,989 1,440,315 1,547,057 1,699,835 1,838,268 8.1
MINI 241,043 294,120 311,490 303,177 322,803 6.5
Rolls-Royce 3,221 3,725 3,279 3,354 4,495 34.0
Total 5 1,481,253 1,738,160 1,861,826 2,006,366 2,165,566 7.9
Motorcycles segment
Production volume 6
BMW 99,236 110,360 113,811 110,127 133,615 21.3
Financial Services segment

New contracts with retail customers 1,083,154 1,196,610 1,341,296 1,471,385 1,509,113 2.6
1
igures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.
F
2
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2010: 53,701 units, 2011: 94,400 units, 2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units).
3
E U-28.
4
Excluding Husqvarna, sales volume up to 2013: 59,776 units.
5
6
Excluding Husqvarna, production up to 2013: 59,426 units.
4
2010 2011 2012 2013 2014 Change in %
Principal financial performance indicators

BMW Group
Profit before tax € million 4,853 7,383 7,803 7,893 1 8,707 10.3
Automotive segment
Revenues € million 54,137 63,229 70,208 70,630 1 75,173 6.4
EBIT margin % (change in %pts) 8.0 11.8 10.8 9.4 9.6 0.2
RoCE % (change in %pts) 40.2 77.3 73.7 63.0 1 61.7 – 1.3
Motorcycles segment
RoCE % (change in %pts) 18.0 10.2 1.8 16.4 21.8 5.4

RoE % (change in %pts) 26.1 29.4 21.2 20.0 1 19.4 – 0.6
Further financial key performance figures

in € million
Capital expenditure 3,263 3,692 5,240 6,711 1 6,100 – 9.1
Depreciation and amortisation 3,682 3,646 3,541 3,741 1 4,170 11.5
Operating cash flow Automotive segment 8,149 8,110 9,167 9,964 1 9,423 – 5.4
Revenues 60,477 68,821 76,848 76,059 1 80,401 5.7

Automotive 54,137 63,229 70,208 70,630 1 75,173 6.4
Motorcycles 1,304 1,436 1,490 1,504 1,679 11.6
Financial Services 16,617 17,510 19,550 19,874 20,599 3.6
Other Entities 4 5 5 6 7 16.7
Eliminations – 11,585 – 13,359 – 14,405 – 15,955 – 17,057 6.9
Profit before financial result (EBIT) 5,111 8,018 8,275 7,978 1 9,118 14.3
Automotive 4,355 7,477 7,599 6,649 1 7,244 8.9
Motorcycles 71 45 9 79 112 41.8
Financial Services 1,201 1,763 1,558 1,643 1,756 6.9
Other Entities – 41 – 19 58 44 71 61.4
Eliminations – 475 – 1,248 – 949 – 437 1 – 65 85.1
Profit before tax 4,853 7,383 7,803 7,893 1 8,707 10.3

Automotive 3,887 6,823 7,170 6,561 6,886 5.0
Motorcycles 65 41 6 76 107 40.8
Financial Services 1,214 1,790 1,561 1,619 1 1,723 6.4
Other Entities 45 – 168 3 164 154 – 6.1
Eliminations – 358 – 1,103 – 937 – 527 – 163 69.1
Income taxes – 1,610 – 2,476 – 2,692 – 2,564 1 – 2,890 – 12.7

Net profit 3,243 4,907 5,111 5,329 1 5,817 9.2
Earnings per share2 in € 4.93 / 4.95 7.45 / 7.47 7.75 / 7.77 8.081/ 8.10 1 8.83 / 8.85 9.3 / 9.3
1
Prior year figures have been adjusted in accordance with IAS 8, see note 9.
2
Common / preferred stock. In computing earnings per share of preferred stock, earnings to cover the additional dividend of € 0.02 per share of p
referred stock are spread over the
quarters of the corresponding financial year.
5
Sales volume of automobiles* Revenues

in thousand units in € billion
2,100 84
1,800 72
1,500 60
1,200 48
900 36
600 24
300 12

10 11 12 13 14 10 11 12 13 14

1,461.2 1,669.0 1,845.2 1,963.8 2,118.0 60.5 68.8 76.8 76.1* 80.4

* *
Including the joint venture BMW Brilliance Automotive Ltd., S
henyang (2010: Prior year figures have been adjusted in accordance with IAS 8, see note 9.
53,701 units, 2011: 94,400 units, 2012: 141,165 units, 2013: 198,542 units, 2014:
275,891 units).
Profit before financial result Profit before tax

in € million in € million
8,400 8,400
7,200 7,200
6,000 6,000
4,800 4,800
3,600 3,600
2,400 2,400
1,200 1,200

10 11 12 13 14 10 11 12 13 14

5,111 8,018 8,275 7,978* 9,118 4,853 7,383 7,803 7,893* 8,707

* *
Prior year figures have been adjusted in accordance with IAS 8, see note 9. Prior year figures have been adjusted in accordance with IAS 8, see note 9.
6
Joachim Milberg
Chairman of the Supervisory Board
Dear Shareholders and Shareholder Representatives,

Back in 2007, the BMW Group set a new strategic course with the adoption of its strategy “Number ONE”.
Today, we can look back on the fifth successive year in which we have achieved record figures. Responsible
management involves anticipating new developments and initiating the next moves in good time to ensure
the future success of the business. This forward-looking approach applies equally to the Supervisory Board.
By taking the step of announcing Harald Krüger’s future appointment to the position of Chairman of the
Board of Management at an early stage and implementing other decisions with respect to the board’s com-
position, the resolutions adopted by the Supervisory Board in 2014 have set a clear-cut course for the future
leadership of the BMW Group. At the same stage, we also announced our plan to ring in a change at the
head of the Supervisory Board in 2015 by declaring our unanimous support in favour of the appointment of
Dr Norbert Reithofer as its new Chairman. With the backing of major shareholders, we intend to propose
his election to the Supervisory Board at the Annual General Meeting. These proposed changes in leadership
have been initiated in order to strengthen the position of the BMW Group by ensuring a long-term manage-
ment perspective.
Main emphases of the Supervisory Board’s monitoring and advisory activities The Supervisory Board
again advised the Board of Management during the past financial year and carefully monitored its governance
of the business. Our work, both within the Supervisory Board and together with the Board of Management,
was constructive and characterised by open, trustful interaction.
In a total of five Supervisory Board meetings, we deliberated on the current situation of the BMW Group
as well as on macroeconomic developments in its most important sales markets. Additional key points of
debate at our meetings were Group corporate strategy and planning. Furthermore, we developed concepts
for a generational change at the chair level of both the Board of Management and the Supervisory Board, took
decisions regarding the composition and compensation of the Board of Management and passed resolutions
with respect to corporate governance.
We carefully monitored the performance of the BMW Group, both at scheduled meetings and at other times
as the need arose. In particular, the Board of Management kept us well informed of all key sales and workforce
figures. The Chairman of the Board of Management, Dr Norbert Reithofer, informed me promptly and di-
rectly about major business transactions and projects. In addition to scheduled meetings, Dr Karl-Ludwig Kley,
the Chairman of the Supervisory Board’s Audit Committee, and Dr Friedrich Eichiner, member of the Board
of Management responsible for Finance, consulted with each other directly at other times as the need arose.
At the beginning of the year, the Board of Management presented us with a summary of new and revised
models scheduled for market launch over the course of 2014.
In its regular reports on the financial condition of the Group, the Board of Management informed us of
sales volume developments and market competition issues relevant for the Automotive and Motorcycles
segments and highlighted fluctuations in the size of the workforce. Equally, we were kept up to date with
respect to the market developments and economic prospects of the world’s key regions. On the Financial
Services side of the business, the Board of Management provided us with regular updates on new business
with retail customers, changes in the portfolio of contracts with dealerships and retail customers as well as
the total volume of business.
The Board of Management also reported to us on its intention to increase the size of the Group’s produc-
tion network, with particular regard to the planned expansion of the Spartanburg plant in South Carolina,
USA, and the search for a new plant location in the NAFTA region, which is now due to be built in San Luis
Potosí, Mexico. As part of this process, we also discussed with the Board of Management the general sig
nificance and scope of the “production follows the market” principle in the context of the global distribution
of value added along the production chain.
8
Furthermore, both in business status reports and subsequent discussions with the Board of Management,
numerous important current events and projects were addressed, such as the extension of the cooperation
agreement with the Chinese joint venture partner Brilliance, the cooperation with Toyota and the current
state of plans for the long-term development of production facilities in Russia. Other topics reported on and
discussed at Supervisory Board meetings included the start-up of the new MINI at the Oxford plant, the
current situation with recalls and the economic impact of the Ukraine conflict.
One Supervisory Board meeting was held in Shenyang, one of the locations operated by the BMW Brilliance
Automotive Ltd. (BBA) joint venture in China. Representatives of the managements of BBA and the BMW
sales company reported to us on sales volume trends and the car market in China in general as well as plans
for additionally increasing production capacity in the plants located at Tiexi and Dadong in Shenyang. We
also visited the production facilities of the Tiexi plant. Moreover, in the course of our on-site visits we gathered
useful facts regarding cooperation with suppliers and dealerships in China. Reports from, and discussions
with, local management representatives provided us with a useful overview of local developments in China
and individual development projects, and helped provide a good insight into the specific needs of Chinese
customers.
One two-day meeting of the Supervisory Board dealt with the BMW Group’s corporate and product
strategies as well as the Long-term Business Forecast. The format of the two-day meeting was designed to
provide the opportunity for an in-depth discussion with the Board of Management on forward-looking
topics and technical innovations.
In the first part of the meeting, together with the Board of Management we discussed the results of the
corporate strategy Number ONE review, which is performed by the Board of Management once a year. Our
discussions primarily focused on challenges involving further reductions in carbon emissions and also the
electrification, digitisation and, in particular, the increasing connectedness of vehicle data. As part of its strategy
review report, the Board of Management also looked at the importance of the “Future Retail” programme,
which is designed to improve sales and after-sales services by consistently seeing things from the point of view
of customers and intensifying their product and brand experience.
In the course of various vehicle presentations, we were given the opportunity to test selected BMW, MINI
and Rolls-Royce brand cars on a test track. In addition, the current state of progress of selected vehicle de-
velopment projects was presented and explained to us.
In the second part of the meeting we deliberated at length on the Long-term Business Forecast pre-
sented by the Board of Management for the years 2015 – 2020. After diligent examination, we approved
the forecast.
We also gave in-depth consideration to the business development, strategic direction and role of the Finan-
cial Services segment going into the future. The Board of Management also reported on the latest develop-
ments on used car markets and explained individual measures designed to further improve the stability of
the segment in times of crisis.
The two boards jointly discussed the annual budget put forward by the Board of Management towards the
end of the year under report for the financial year 2015, and considered pertinent external factors.
The structure and amount of compensation of Board of Management members was examined once again in
2014 by both the Personnel Committee and the full Supervisory Board. In addition to comparing performance
trends and board compensation on a multi-year basis, we also reviewed he development of the remuneration
of senior management and employees of BMW AG within Germany over the course of time. An external
compensation consultant, independent of both the Board of Management and BMW AG, was called upon to
provide expert advice and assist us in evaluating DAX compensation studies. After a careful review, we con-
cluded that the compensation of board members is appropriate and that the current compensation system
is functioning well. Further information on the compensation of Board of Management members is provided
in the Compensation Report (see chapter Statement on Corporate Governance).
Corporate governance The Supervisory Board and the Board of Management again jointly addressed the
topic of corporate governance within the BMW Group in 2014. In the most recent Declaration of Compliance,
issued in December 2014, the Board of Management and the Supervisory Board declared that the BMW
Group has and will continue to comply with all of the recommendations of the German Government Cor-
porate Governance Code Commission published on 30 September 2014 (Code version; 24 June 2014), with
one exception, which relates to the presentation of information concerning Board of Management compensa-
tion using stipulated model tables. We remain committed to providing information on board compensation
that is both as comprehensive and comprehensible as possible, taking into account all relevant financial
reporting requirements. After careful consideration, we came to the conclusion that the additional use of the
tables recommended in the Code would not improve the desired level of transparency and readability of
the Compensation Report.
As part of the joint examination of corporate governance within the BMW Group, the Board of Manage-
ment informed both the Personnel Committee and the full Supervisory Board on the status of implementa-
tion of the BMW Group’s diversity concept. This programme does not only focus on gender, it is also aimed
at promoting diversity in other areas, particularly in terms of cultural diversity and age mix within the work-
force. We were also informed with respect to the proportion and number of women occupying positions
at various levels of management and deliberated with the Board of Management on the planned measures to
continue the process of raising that proportion, specifically at a senior level. Consideration was also given to
draft legislation relating to equal participation of women and men in management positions in Germany and
the potential impact of this legislation on the BMW Group.
With regard to its own composition, based on a detailed composition profile, the Supervisory Board has
decided upon specific appointment targets, which are discussed in detail in the Corporate Governance Report.
Based on a self-assessment, the Supervisory Board concluded that its composition at 31 December 2014
meets the targets set.
BMW AG has entered into contracts for personnel-related services with an external entity, in which mem-
bers of the Supervisory Board have an indirect participation. During the year under report, the Personnel
Committee approved an amendment to these contracts as a precautionary measure. None of the members of
the Supervisory Board with an interest in the relevant entity participated in this vote. Apart from this one
matter, there were no indications of potential conflicts of interest involving Supervisory Board members during
the financial year 2014.
Supervisory Board members are required to provide information on a quarterly basis of any significant
transactions they or other related parties (as defined by IAS 24), including close relatives and intermediary
entities, have with BMW Group entities.
We are fully committed to assessing and continuously improving the efficiency of the work of the Super-
visory Board and its committees. The Chairman of the Audit Committee and myself are therefore always
glad to receive comments and suggestions for improvement from Supervisory Board members. The formal
examination of the Supervisory Board’s efficiency is also treated each year as a separate agenda point
for discussion, without the members of the Board of Management being present. The efficiency examination
10
in 2014, again prepared with the aid of a questionnaire, resulted in a number of suggestions being accepted
for additional consideration.
Each of the five Supervisory Board meetings in 2014 was attended, on average, by over 95 % of its mem-
bers, a fact that can be tied in to the analysis of attendance fees for individual members, as disclosed in the
Compensation Report. No member of the Supervisory Board was absent at more than two meetings during
the period under report. Presiding Board and committee meetings were fully attended in the vast majority of
cases (see chapter Statement on Corporate Governance).
Description of Presiding Board activities and committee work In order to work more efficiently and
prepare complex issues and decisions with greater thoroughness, the Supervisory Board has established
a Presiding Board and several committees. A description of the duties, composition and work procedures of
these committees is provided in the Corporate Governance Report.
The relevant chairmen reported in depth on the status of Presiding Board and committee work at the
subsequent Supervisory Board meeting.
In a total of four meetings, the Presiding Board focused mainly on preparing topics for the meetings of
the full Supervisory Board, unless this responsibility fell under the remit of one of the committees. Complex
issues, such as the Long-term Business Forecast and the Annual Strategic Review, were dealt with on the
basis of written and oral reports provided by Board of Management members and senior department heads.
The Presiding Board selected further topics of discussion for Supervisory Board meetings and made sugges-
tions to the Board of Management regarding items to be included in its reports to the full Supervisory Board.
The Audit Committee held four meetings and three telephone conference calls during 2014. Prior to their
publication, the Interim Financial Reports were discussed with the Board of Management in those telephone
conference calls. Representatives of the external auditors took part in the telephone conference call held to
present the Interim Financial Report for the six-month period ended 30 June 2014. The report had been sub-
jected to review by the external auditors.
The Audit Committee meeting held in spring 2014 was primarily dedicated to preparing the Supervisory
Board meeting at which the financial statements were examined. Prior to proposing KPMG AG Wirtschafts
prüfungsgesellschaft for election as Company and Group auditor at the 2014 Audit Committee Meeting, we
obtained a Declaration of Independence from KPMG. The Audit Committee also considered the scope and
composition of non-audit-related services, including tax advisory services provided by KPMG entities to the
BMW Group. There were no indications of conflicts of interest, grounds for exclusion or lack of independence
on the part of the auditor.
The fee proposals for the audit of the year-end Company and Group Financial Statements 2014 and
the review of the six-month Interim Financial Report were deemed appropriate by the Audit Committee.
Subsequent to the Annual General Meeting 2014, the Audit Committee therefore appointed KPMG AG
Wirtschaftsprüfungsgesellschaft for the relevant engagements and, with due consideration to the sugges-
tions made by the full Supervisory Board, specified a number of audit focus areas.
The Head of Group Controlling reported to the Audit Committee on risk management processes within
the BMW Group, provided information with respect to new developments and elucidated a number of risks
which are required to be reported on in accordance with internal rules.
The Head of Group Financial Reporting provided the Audit Committee with an up-to-date overview of
developments concerning the internal control system (ICS), which serves as the basis for financial reporting.
Testing performed during the year under report did not highlight any material ICS weaknesses which could
jeopardise the system’s effectiveness.
The Chairman of the BMW Group Compliance Committee reported to the Audit Committee on the con-
cept that has been developed to strengthen local compliance functions as well as on the current compliance
situation, which, as in the previous year, was deemed satisfactory overall. None of the information received
relating to potential non-compliance or actual incidences of non-compliance identified in specific cases gave
any indication of serious or systemic non-compliance with applicable requirements.
The Head of Group Internal Audit reported to us in the Audit Committee on the organisation of the Group
Internal Audit as the BMW Group’s “Third Line of Defence”, informed us of the significant findings of audits
conducted by Group Internal Audit, on both the industrial and financial services sides of the business, and
explained the main points of emphasis for planned audits.
We concurred in the Audit Committee with the decision of the Board of Management to raise the Com
pany’s share capital in accordance with § 4 (5) of the Articles of Incorporation (Authorised Capital 2014) by
€ 239,757 and to issue a corresponding number of new non-voting bearer shares of preferred stock, each with
a par value of € 1, at favourable conditions to employees.
The Personnel Committee convened six times during the financial year 2014. One major area of deliberation
was the future composition of the Board of Management, with particular regard to preparing for successor
decisions, including consideration of possible scenarios for the future change in the chair of the Board of
Management.
In preparation for the full Supervisory Board’s meetings, the Personnel Committee reviewed the structure
and appropriateness of Board of Management compensation and prepared the Supervisory Board’s decision
with respect to board members’ bonuses. In two cases we also gave our approval for one member of the
Board of Management to accept the mandate for membership of the supervisory board of a non-BMW Group
entity.
The Nomination Committee convened twice during the financial year 2014. At these meetings, we deliber-
ated on successor planning for mandates of the shareholders’ representatives on the Supervisory Board and
considered proposals for candidates for the Supervisory Board elections at the Annual General Meeting 2015,
taking the composition objectives stipulated for the Supervisory Board into due account.
The statutory Mediation Committee was not required to convene during the financial year 2014.
Generational change at head of Board of Management and Supervisory Board initiated The Supervisory
Board worked through a number of scenarios with respect to succession planning at the head of the Super
visory Board and – together with the Chairman of the Board of Management, Dr Norbert Reithofer – assessed
the range of options available for selecting a new Chairman of the Board of Management. Various constella-
tions were examined, including the important issue of timing. We wanted to bring about a farsighted, timely
change in leadership in order to strengthen the position of the BMW Group with a long-term perspective
for management. We shared the opinion of major shareholders that Dr Reithofer’s wealth of knowledge and
experience should be retained within the BMW Group and that the Supervisory Board would benefit greatly
from his playing a key role in its work.
The Supervisory Board therefore supports the proposal that Dr Norbert Reithofer be appointed to the
position of Chairman of the Supervisory Board – subject to his election to that board. After carefully con
sidering various scenarios, the conclusion was reached that a direct move by Dr Reithofer to the position of
12
Chairman of the Supervisory Board – without an interim phase – will strengthen the role of the Supervisory
Board and is thus in the best interests of the BMW Group.
In order to ensure that this generational change can also take place in good time at the head of the Super-
visory Board, in agreement with its other members, I have resigned my mandate as Supervisory Board
member with effect from the end of the Annual General Meeting 2015.
In due consideration of these developments, the Supervisory Board has reached agreement with
Dr Reithofer concerning the early termination of his Board of Management mandate and his service con-
tract with effect from the end of the Annual General Meeting 2015.
Harald Krüger has been appointed Chairman of the Board of Management with effect from the end of the
Annual General Meeting 2015, to coincide with Dr Reithofer’s planned exit from the Board of Management.
Harald Krüger brings a great deal of experience to this position from his previous board responsibilities. Since
2013, he has been in charge of Production, before which, from 2008 to 2012, he was first responsible for Human
Resources and then for the MINI, BMW Motorrad, Rolls-Royce and BMW Group Aftersales division.
Other changes in the composition and organisational structure of the Board of Management Klaus
Fröhlich, previously Head of Small and Mid-size Series BMW Group, was appointed as member of the Board
of Management with effect from 9 December 2014, with responsibility for Development. His predecessor,
Dr Herbert Diess, resigned from the Board of Management on 9 December 2014.
With effect from the end of the Annual General Meeting 2015, the Supervisory Board appointed
Oliver Zipse, most recently Head of Corporate Planning and Product Strategy, as a member of the Board of
Management. He will take over responsibility for Production from Harald Krüger.
The Supervisory Board also renewed the appointment of three Board of Management members in 2014.
Other personnel changes in the Supervisory Board In accordance with the regulations of the Co-Deter-
mination Act, the ten employee representatives were re-elected with effect from the end of the Annual
General Meeting on 15 May 2014.
After 10 years of valuable and highly appreciated work in the Supervisory Board, Bertin Eichler did not
stand for re-election. In his place, Christiane Benner (Executive Board member of IG Metall) was newly
elected to the Supervisory Board as union representative. As a result, the Supervisory Board now has five
female members (25%). Ulrich Kranz, Head of the BMW i product line, was newly elected to the Super visory
Board to succeed Dr Markus Schramm as executive staff representative. The Supervisory Board thanked
the members leaving office for their constructive work and trusting cooperation within the Supervisory
Board. The composition of the Presiding Board and the committees remained unchanged in 2014, with all
previous members confirmed in their respective functions. The Corporate Governance Report includes an
overview of the composition of the Supervisory Board and its committees (see chapter Statement on Corpo-
rate Governance).
Wolfgang Mayrhuber has resigned his mandate as member of the Supervisory Board with effect from
the end of the Annual General Meeting 2015. We also wish to extend our thanks to him for more than
ten years of valuable and highly appreciated service in the Supervisory Board, always working in the best
interest of the Group.
Examination of financial statements and the profit distribution proposal KPMG AG Wirtschafts
prüfungsgesellschaft conducted a review of the abridged Interim Group Financial Statements and Interim
Group Management Report for the six-month period ended 30 June 2014. The results of the review were
presented to the Audit Committee by KPMG representatives. No issues were identified that might indicate
that the abridged Interim Group Financial Statements and Interim Group Management Report had not been
prepared, in all material respects, in accordance with the applicable provisions.
The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the
year ended 31 December 2014 and the Combined Management Report – as authorised for issue by the Board
of Management on 19 February 2015 – were audited by KPMG AG Wirtschaftsprüfungsgesellschaft and
given an unqualified audit opinion.
The Financial Statements and the Combined Management Report, the long-form audit reports of the
external auditors and the Board of Management’s profit distribution proposal were made available to all
members of the Supervisory Board in a timely manner.
These documents were examined and discussed thoroughly by the Audit Committee at the meeting held
on 5 March 2015. The Supervisory Board subsequently examined these documents at its meeting on 12 March
2015, after receiving the committee chairman’s report on the meeting of the Audit Committee. In both
meetings, the Board of Management gave a detailed explanation of the financial reports it had prepared.
Representatives of the external auditors attended both meetings, reported on significant findings and an-
swered any additional questions raised by the members of the Supervisory Board. They also confirmed that
the risk management system put in place by the Board of Management is capable of identifying any events
or developments that might impair the going-concern status of the Company and that no material weak-
nesses in either the internal control system or the risk management system were found with regard to the
financial reporting process. Similarly, they confirmed that they had not identified any facts in the course of
their audit work that were inconsistent with the contents of the Declaration of Compliance issued jointly by
the two boards.
Based on thorough examination by the Audit Committee and the full Supervisory Board, we concurred
with the results of the external audit. In accordance with the conclusion reached after the examination by
the Audit Committee and Supervisory Board, no objections were raised. The Group and Company Financial
Statements of Bayerische Motoren Werke Aktiengesellschaft for the financial year 2014 prepared by the Board
of Management were approved at the Supervisory Board meeting held on 12 March 2015. The separate finan-
cial statements have therefore been adopted.
The Supervisory Board also examined the proposal of the Board of Management to use the unappropriat-
ed profit to pay an increased dividend of € 2.90 per share of common stock and € 2.92 per share of non-voting
preferred stock. We consider the proposal appropriate and therefore concur with it.
Expression of appreciation by the Supervisory Board We wish to express our appreciation to the mem-
bers of the Board of Management and the entire workforce of the BMW Group worldwide for their concerted
efforts and outstanding contribution to the record result we are able to post for the financial year 2014.
Munich, 12 March 2015
On behalf of the Supervisory Board
Joachim Milberg
Chairman of the Supervisory Board
14
Norbert Reithofer
Chairman of the Board of Management
15 STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT
Dear Shareholders,
The successes a company has achieved in the past belong to its history. All that matters today is a com
pany’s future. Forward-looking companies renew themselves of their own initiative. It is crucial for a company
to question its own actions, explore new directions and consistently implement innovations to benefit its
customers. Financial strength allows companies to invest in the future – thereby securing long-term success
and fulfilling responsibilities towards shareholders, associates and other stakeholders.
BMW will reach its 100th year in 2016. We naturally plan to celebrate this important milestone in our
history. It is a testament to our value-based corporate philosophy, geared towards the long term and shaped
by independent-minded decisions. But above all else, this centenary compels us to look to the future.
Investors in the BMW Group can look forward to long-term value enhancement, on the basis of healthy,
organic growth. Our shareholders can rely on us to sustain our profitability. Strong competition, market
volatility, political uncertainty, new trends in our environment – all of this is part of our daily business.
We firmly believe that mobility will remain a fundamental human need and a cornerstone of dynamic
economies. We aim to lead the industry with our ideas in all areas of individual mobility, transporting sheer
driving pleasure to a new age of sustainable mobility. This is an exciting direction for us – and a profitable
one for our shareholders who accompany us along this path.
2014 financial year – fifth successive record year for the BMW Group In the 2014 financial year, the
company’s successful development since the global financial and economic crisis of 2008 / 2009 continued.
We had set ourselves ambitious goals in a difficult environment: record sales of over two million vehicles;
our highest-ever Group profit before tax, with a significant increase year-on-year; and an EBIT margin in our
target range of eight to ten per cent for the Automotive Segment.
Today, we can say: we delivered on our promises. Group profit before tax climbed 10.3 per cent to
8.7 billion euros. Net profit increased by 9.2 per cent to more than 5.8 billion euros. The EBIT margin in the
Automotive Segment stands at 9.6 per cent and therefore at the upper end of our target range.
Strong demand for our premium vehicles is the main factor contributing to record revenues of 80.4 billion
euros. For the first time, we sold more than two million vehicles worldwide in a single year – 2.118 million
BMW, MINI and Rolls-Royce vehicles, to be exact – fulfilling a wish for many customers. This represents an
increase of 7.9 per cent over the previous year and a new sales high for the BMW Group.
With regard to our individual brands, there were new records for BMW, Rolls-Royce and BMW Motorrad.
More than 1.8 million customers purchased a BMW in 2014. Our MINI brand maintained roughly the same
high level as the previous year, with a total of 302,000 vehicles sold, despite the model changeover. Our
MINI plant in Oxford in the UK produced its three-millionth MINI last year. With exactly 4,063 vehicles sold,
Rolls-Royce remains in strong demand and continues to set the standard for the ultra-luxury class. BMW
Motorrad also reported growth, with more than 123,000 deliveries, and once again outperformed the overall
market. The anniversary model BMW R nineT and the fully electric C evolution proved popular with both
customers and the automotive press.
The Financial Services segment once again made a solid contribution to the success of the BMW Group.
Impact of Strategy Number ONE reflected in key performance indicators We laid the foundation for
this successful development back in 2007 with our Strategy Number ONE. This strategy guides all our busi-
ness activities into 2020 and has already taken the company to a new dimension. We operate at an entirely
different level of performance today than in 2007.
16
Customer deliveries climbed more than 40 per cent between the end of 2007 and the end of 2014. Group
revenues increased by 44 per cent over the same period while pre-tax earnings more than doubled. During
this time, BMW common shares performed much better than the DAX. Our associates, as well as our share-
holders, benefit from this positive development through our preferred shares programme.
We owe our achievements to our associates worldwide Our successful business development is driven
by our 116,324 associates worldwide. Their skills, their performance and their dedication – each in his or her
own area of responsibility – contribute to the overall success of the company.
Our associates at all 30 BMW Group production sites in 14 countries are our most important success factor.
We are investing extensively in vocational and professional training to qualify them for new demands and
technologies, such as digitalisation. Between 2007 and the end of 2014 alone, we channelled around 1.8 billion
euros into vocational and professional training – more than in our Efficient Dynamics technology package.
People and technology have the same importance for us.
The younger generation ensures our future success: more than 1,500 apprentices worldwide embarked
on a career with us in September 2014; 1,200 of them in Germany. A total of 4,595 young people are currently
in vocational training with the BMW Group. This represents an increase of 150 over the previous year.
I would therefore like to thank all our associates on behalf of the Board of Management. I would also like
to thank all our business partners, and especially our suppliers, who play such a key part in our success.
And, of course, our thanks also extend to our entire retail organisation and the dealers who are our link to
the customer.
Customers have the choice: sheer driving pleasure also available with electric and hybrid drivetrains
The new BMW i family has further strengthened our image as the industry’s leading innovator. 2014 was the
first year of availability for the pure electric BMW i3. More than 16,000 customers chose this model, which
was specially designed for urban areas. The BMW i8 has been available to customers since summer. Orders for
the BMW i8 plug-in hybrid continue to well exceed the planned number of units for production. A total of
1,741 BMW i8 vehicles were delivered to customers from June to December.
We also use our know-how and experience with BMW i in series production of our other models. In autumn
2015, we will release our first plug-in hybrid BMW X model, the BMW X5 xDrive40e, which incorporates the
technological expertise gained from BMW i. The new BMW 7 Series is also set to become the benchmark for
lightweight design in its segment through the use of carbon fibre. Over time, all model series will be available
with electric drive technology. Climate protection policies worldwide will remain challenging and growing
urbanisation demands new mobility solutions.
We will continue to chart our own course with Efficient Dynamics, hybridisation and electromobility.
There is no way back. Average emissions for our European fleet currently stand at 130 grams of CO2 per
kilometre. At the same time, we are focusing on sustainable production and efficient use of resources. Since
2006, we have reduced average resource consumption per vehicle produced by 45 per cent. Sustainability
pays dividends – in every respect.
Targeted expansion of our global production network We continue to aim for a balanced distribution
of sales between the three main economic regions of the world. This allows us to offset fluctuations in indi-
vidual markets and avoid overdependence on any single region. In 2014, Europe accounted for around 43 per
cent of sales, Asia 31 per cent and the Americas just under 23 per cent.
The global automobile market continues to expand: from around 62 million new vehicle registrations in
2007 to more than 80 million in 2014. We see no contradiction between participating in this growth and
maintaining the desirability of our premium brands. In 2014, we continued to create the conditions necessary
for strategic expansion of our global production network. In October, the first car rolled off the assembly
line at our new plant in Araquari, Brazil. This gives us a permanent presence in an important growth region.
17 STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT
In Mexico, preparations are underway for the opening of a new plant with a capacity of up to 150,000 units
in 2019. During celebrations to mark the 20th anniversary of our Spartanburg plant, we announced an in-
crease in capacity there to 450,000 units. We are also stepping up local production at our facility in Shenyang,
China, which is set to build six BMW models specifically for the Chinese market. We have already extended
our joint venture with Brilliance to 2028, thereby paving the way for further growth in China.
The innovation of our engineers and developers ensures the company’s continued success. In 2014, we
invested more than 4.5 billion euros in research and development. Between now and 2018, we will expand
and modify our FIZ Research and Innovation Centre in Munich. Once the final stage of expansion is com-
plete, the investment will be equivalent to building a completely new plant.
Connectivity defines our times and will dominate the future The digital, connected world is a particularly
important area for premium manufacturers when it comes to differentiation and growth. It affects both the
vehicle itself and the way that vehicle is produced. Last year, at our Spartanburg and Dingolfing plants, we
took a major step towards intensive human-robot collaboration. We use this form of cooperation selectively in
areas where it adds value and relieves associates of heavy physical work, enabling them to stay healthy for a
long time.
The car as a part of the Internet will change our industry even more than the shift to alternative drivetrains.
As in-car connectivity increases, new competitors will seek access to customers in their vehicles. We are
committed to shaping the age of in-car connectivity responsibly, in the interests of our customers. We already
offer advanced driver assistance systems in our vehicles today. Moreover, we also have the capacity for highly
autonomous driving.
Mobility services mainly used by young people We are selectively expanding our range of mobility
services: car-sharing is one option that is particularly appealing to young people. London and Vienna are
two further European cities outside of Germany that have now been added to our DriveNow offering. By the
end of 2014, around 390,000 customers had already registered with DriveNow. Additional cities in Europe
and in the US will follow in 2015.
The course is set for the future To mark our centenary on 7 March 2016, we deliberately choose to look
to the future. Every age has its challenges and must find its own solutions. That is why we give younger
generations the chance to shape the further development of the company according to their own ideas.
In December 2014, the Supervisory Board decided to make a change at the head of the company’s Board
of Management. Our Board of Management Member for Production Harald Krüger will take over as Chairman
of the Board of Management after the 2015 Annual General Meeting. This generational change will enable
the company to move forward with new ideas and impulses.
As you can see, much still remains to be done. New trends and challenges also bring new business opportu-
nities and possibilities. I strongly believe that the BMW Group will grow dynamically, by innovatively shaping
the individual mobility of the future in all its forms and continuing to be a responsible partner for society.
The course is set for the future.
Norbert Reithofer
Chairman of the Board of Management
18
COMBINED MANAGEMENT REPORT

General Information on the BMW Group
Business Model
This Combined Management Report combines the Long-term thinking and responsible action have always
management reports of BMW AG and the BMW Group. been the cornerstones of our success. Striving for eco-
logical and social sustainability along the entire value-
General information on the BMW Group added chain, taking full responsibility for our products
18 General Information on the BMW Group General information on the BMW Group is provided be- and giving an unequivocal commitment to preserving
18 Business Model
low. There have been no significant changes compared resources are prime objectives firmly embedded in our
23 Report on Economic Position to the previous year. corporate strategy. As a result of these endeavours, we
have ranked among the most sustainable companies in
23 General and Sector-specific
Environment
26 Overall Assessment by Management Business model the automobile industry for many years.
26 Financial and Non-financial
Performance Indicators Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
29 Review of Operations which is based in Munich, Germany, is the parent com- The BMW Group operates on a global scale and is repre-
49 Results of Operations, Financial
Position and Net Assets pany of the BMW Group. The primary business objective sented in more than 140 countries worldwide. Its re-
61 Comments on Financial Statements of the BMW Group is the development, manufacture and search and innovation network is spread over twelve
of BMW AG
64 Events after the End of the sale of engines as well as of all vehicles equipped with locations in five countries. At 31 December 2014 the
Reporting Period
65 Report on Outlook, Risks and
those engines. The BMW Group is subdivided into the Group’s production network comprised a total of 30 lo-
Opportunities Automotive, Motorcycles, Financial Services and Other cations in 14 countries.
65 Outlook
Entities segments (the latter primarily comprising hold-
82 Internal Control System and Risk ing companies and Group financing companies). BMW 3 Series and 4 Series models as well as petrol and
diesel engines are manufactured at the BMW Group
Management System Relevant for the
Consolidated Financial Reporting P
rocess
83 Disclosures Relevant for Takeovers Bayerische Motoren Werke G. m. b. H. came into plant in Munich, next to the BMW Group’s headquarters.
and Explanatory Comments
87 BMW Stock and Capital Markets being in 1917. Having been originally founded in Models of the BMW 1, 3 and 4 Series as well as the Z4
1916 as Bayerische Flugzeugwerke AG (BFW), it be- Roadster roll off the production lines at the Regensburg
came Bayerische Motoren Werke Aktiengesellschaft plant. The currently largest BMW Group plant is located
(BMW AG) in 1918. The BMW Group comprises in Dingolfing, where we build the BMW 3 Series Gran
BMW AG and all subsidiaries, which BMW AG – either Turismo, the BMW 4 Series Gran Coupé, models of
directly or indirectly – has the power to control. the BMW 5, 6 and 7 Series as well as hybrid BMW 5 and
BMW AG is also responsible for managing the BMW 7 Series vehicles. Chassis and drive components are also
Group. General conditions on the world’s automobile manufactured at this plant. The BMW Group Leipzig
and motorcycle markets (such as the competitive situa- plant’s production range covers models of the BMW 1
tion, government policies, statutory regulations), and 2 Series, the BMW X1 and the electrically powered
underlying trends within society as well as changes BMW i3 as well as the BMW i8 hybrid sports car. The
in raw materials prices, exchange rates and interest BMW 3 Series Sedan is assembled at the plant in
rates are some of the major external factors that exert Rosslyn (South Africa). The BMW Group plant in
an influence over our business. Spartanburg (USA) is responsible for producing the
BMW X3, X4, X5 and X6 models. BMW X1 and models
The BMW Group is one of the most successful makers of the BMW 3 and 5 Series are built exclusively for
of cars and motorcycles worldwide and among the the C
hinese market at the two plants operated by
largest industrial companies in Germany. With BMW, the BMW Brilliance Automotive Ltd. joint venture in
MINI and Rolls-Royce, the BMW Group owns three of Shenyang (China).
the strongest premium brands in the automotive in
dustry. The vehicles it manufactures set the highest Components for the worldwide production network are
standards in terms of aesthetics, dynamics, technology manufactured at the BMW Group plants in Landshut
and quality, a fact borne out by the BMW Group’s and Wackersdorf. The Eisenach plant is responsible for
leading position in engineering and innovation. In addi- toolmaking. The two production sites in Moses Lake
tion to its strong position in the motorcycles market, (USA) and Wackersdorf are operated by the SGL Auto-
the BMW Group also offers its customers a successful motive Carbon Fibers (ACF) joint venture and supply
range of financial services. In recent years, the Group carbon fibre and carbon fibre fabrics for the production
has also established itself as a leading provider of pre- of BMW i models. The BMW Group’s largest engine
mium services for individual mobility. At the end of the manufacturing plant in Steyr (Austria) makes petrol and
reporting period, the BMW Group had a workforce of diesel engines for the various BMW plants and diesel
116,324 employees worldwide. engines for the MINI. In 2012 the BMW Brilliance Auto-
19 Combined Management Report
motive Ltd. joint venture opened an engine plant in Our premium brands – BMW, MINI and Rolls-Royce –
Shenyang (China), which supplies petrol engines to its are well known and highly admired around the globe
neighbouring plants. for their innovative technologies and state-of-the-art
design. The BMW Group provides the full spectrum of
The primary function of the BMW Group’s assembly individual mobility, ranging from premium-segment
plants is to serve nearby regional markets. BMW cars are small vehicles through to ultra-luxurious and powerful
currently being assembled in Chennai (India), Jakarta vehicles. Our entire product range is linked by one
(Indonesia), Cairo (Egypt), Kaliningrad (Russia), Kulim characteristic: efficiency. The MINI brand is a veritable
(Malaysia) and Rayong (Thailand). Production at the icon in the premium small car segment, offering unri-
BMW Group’s newest plant in Araquari (Brazil) cur- valled driving pleasure in its class. Rolls-Royce has a
rently covers the BMW 3 Series and the X1, and will be long and distinguished tradition in the ultra-luxury seg-
extended to include the BMW 1 Series, the X3 and the ment stretching back over more than 100 years. Our
MINI Countryman over the course of 2015. core BMW brand satisfies a broad spectrum of customer
wishes, ranging from fuel-efficient, innovative models
The MINI models – Hatch (3- and 5-door), Convertible, equipped with Efficient Dynamics through to high-per-
Coupé and Roadster – are manufactured at the Oxford formance, extremely efficient BMW M sub-brand vehi-
plant (United Kingdom). The UK production triangle cles, which bring the flair of motor sport onto the roads.
also includes the components plant in Swindon as well All BMW vehicles share one thing in common: their im-
as the engine plant at Hams Hall, where petrol engines pressive driving dynamics.
are manufactured for MINI and BMW. In Graz (Austria),
Magna Steyr Fahrzeugtechnik manufactures the MINI Our understanding of the term “premium” is now being
Countryman and, since 2012, the MINI Paceman for taken to a new level with the BMW i brand. Inspired
the BMW Group. In 2014 the Dutch car manufacturer, through and through by the desire for even greater sus-
VDL Nedcar bv (Born) began producing the MINI Hatch tainability, the BMW i epitomises the vehicle of the
on behalf of the BMW Group. future – with its electric drivetrain, revolutionary light-
weight construction, exceptional design and an entirely
The Rolls-Royce Phantom, Ghost and Wraith models newly designed range of mobility services.
are manufactured exclusively at the Goodwood plant
(United Kingdom). BMW Motorrad also focuses on the premium segment
and offers a range of motorcycles for the Tourer, Enduro,
BMW motorcycle models roll off the production lines at Sport and Roadster segments as well as Maxi-Scooter
the BMW Group plant in Berlin. Car brake discs are for urban mobility. A wide range of accessories and
also produced at this location. Two further motorcycle equipment is also available, providing additional safety
assembly plants are located in Manaus (Brazil) and and comfort to customers.
Rayong (Thailand).
The Financial Services segment, which works in t andem
The worldwide distribution network currently consists with the sales organisation, is represented in more than
of around 3,250 BMW, 1,550 MINI and 130 Rolls-Royce 50 countries around the world. Credit f inancing and
dealerships. In China alone, more than 40 BMW dealer- the lease of BMW Group brand cars and motorcycles to
ships and 30 MINI dealerships were opened in 2014. retail customers is its largest line of business. The BMW
Products and services are sold in Germany through Group’s international multi-brand fleet business, oper-
BMW Group branches and by independent authorised ating under the brand name “Alphabet”, provides fleet
dealers. Sales outside Germany are handled primarily financing products and comprehensive management
by subsidiary companies and, in a number of markets, services for corporate car fleets in 19 countries. Within
by independent import companies. The dealership the multi-brand f inancing line of business, credit financ-
and agency network for BMW i currently covers some ing, leasing and other services are marketed to retail
650 locations. The sales network for BMW motorcycles customers under the brand name “Alphera”. The seg-
is organised in a similar way to the automobile business. ment’s range of products is rounded off by providing
Currently, there are around 1,000 BMW Motorrad dealer- support to the dealer organisation and offering insurance
ships worldwide. and banking services.
20
General Information on the BMW Group

Management System
The business management system applied by the BMW term performance and assess strategic issues, additional
Group follows a value-based approach, with a clear focus key performance figures are measured at Group level for
on achieving profitable growth, increasing the value of controlling purposes. The contribution made to busi-
the business for capital providers and safeguarding jobs. ness value growth during the financial year is measured
18 General Information on the BMW Group Corporate autonomy can only be ensured in the long in terms of “value added”. This approach is translated
18 Business Model
term if the profit generated by the business sustainably for operational purposes at both Group and segment
23 Report on Economic Position exceeds the cost of equity and debt capital available to it, level by identifying the main financial and non-financial
thus reflecting the profitable employment of capital. factors (“value drivers”) which affect the value of the
Environment
26 Overall Assessment by Management business. The link between value added and the relevant
Performance Indicators The BMW Group’s internal management system is value drivers is shown in simplified form in the following
29 Review of Operations multilayered. Operating performance is managed first diagram.
Position and Net Assets and foremost at segment level. In order to manage long- Expenses
61 Comments on Financial Statements
of BMW AG
64 Events after the End of the
Reporting Period Profit –
Opportunities
65 Outlook
Return on sales ÷
82 Internal Control System and Risk
rocess Return on capital
Value added − × Revenues
83 Disclosures Relevant for Takeovers (RoCE / RoE)
87 BMW Stock and Capital Markets
Capital turnover ÷
Capital employed
Cost of capital ×
Average weighted cost

of capital rate
Due to the high aggregate impact of various factors, it is of total return or the return on equity capital. The per-
difficult to manage a business proactively simply by formance of the Automotive and Motorcycles segments
focusing on value added. This key figure therefore only is measured on the basis of the return on capital em-
serves for intermediate reporting purposes. ployed (RoCE) and that of the Financial Services seg-
ment using the return on equity (RoE). Profitability (re-
Value drivers which could have a significant impact on turn on sales) and capital efficiency (capital turnover)
profitability and the value of the business are defined are aggregated in the capital rate of return, together with
for each controlling level. The financial and non-finan- a whole host of business-relevant information that has
cial value drivers referred to above are reflected in the an impact on segment performance and changes in the
principal key performance indicators used to manage the value of the business.
business.
Automotive segment
In the case of project decisions, the system is supple- The principal key performance indicator for the Auto-
mented by the application of project-relevant control motive segment is return on capital employed (RoCE),
logic, also utilising value-based and return-based per measured on the basis of segment profit before financial
formance indicators. result and the average level of capital employed in oper-
ations. The strategic target for the Automotive segment’s
Management of operating performance at segment level RoCE is 26 %.
Operating performance is managed at segment level on
the basis of capital rates of return. Depending on the Profit before financial result
RoCE Automotive =
business model, the segments are managed on the basis Capital employed
Capital employed corresponds to the sum of all current Financial Services segment is defined as segment profit
and non-current operational assets, less liabilities that before taxes, divided by the average amount of equity
do not incur interest (e. g. trade payables). capital attributable to the segment. The target is a sus-
tainable return on equity of at least 18 %.
Due to the key importance of the Automotive segment
for the Group as a whole, consideration is also given to RoE Financial Profit before tax
=
additional key value drivers which have a significant Services Equity capital
impact on RoCE and hence on segment performance.
The most important of these additional value drivers are Strategic management at Group level
deliveries to customers, segment revenues and – as the Strategic management of the Group is performed pri-
key performance indicator for profitability – the operat- marily at Group level, including quantification of the
ing return on sales (i.e. EBIT margin). Average carbon financial impact of strategic issues on long-term fore-
emissions for the fleet are also taken into account, re- casting. The most significant performance indicators at
flecting their potential impact on earnings in the short Group level are Group profit before tax and the size
term in the form of ongoing development expenses – of the Group’s workforce at the year end. Group profit
and in the long term due to regulatory requirements. before tax is a good overall measure of the Group’s per-
For these purposes “carbon emissions for the fleet” cor- formance after consolidation procedures, and provides
responds to average emissions of CO2 for new car sales a transparent basis for comparing performance, par-
in the EU-28 countries. ticularly over time. The size of the Group’s workforce is
monitored as an additional key non-financial perfor-
The use of additional key value drivers makes it easier mance indicator.
to identify the reasons for changes in the RoCE and
to define measures capable of influencing its develop- The two key performance indicators – Group profit be-
ment. fore tax and size of the workforce – are supplemented
by a measurement of value added. This highly aggregated
Motorcycles segment performance indicator provides an insight into capital
As with the Automotive segment, operating perfor- efficiency and the (opportunity) cost of capital required
mance for the Motorcycles segment is managed on the to generate Group profit. Value added corresponds to
basis of RoCE. Capital employed is measured using the amount of earnings over and above the cost of
the same procedures as in the Automotive segment. capital and gives an indication of whether the Group is
The strategic target for the Motorcycles segment’s meeting the minimum requirements for the rate of
RoCE is 26 %. return expected by capital providers. A positive value
added means that a company is creating more additional
Profit before financial result
RoCE Motorcycles = value than the cost of capital.
Capital employed
Value added Group = earnings amount – cost of capital
The number of vehicles delivered to customers is also = earnings amount – (cost of capital rate ×
taken into account as a non-financial value driver. capital employed)
Financial Services segment Capital employed comprises the average amount of

As is common practice in the banking sector, the per Group equity employed during the year as a whole, the
formance of the Financial Services segment is measured financial liabilities of the Automotive and Motorcycles
on the basis of return on equity (RoE). RoE for the segments and pension provisions. “Earnings amount”
in € million Earnings amount* Cost of capital * (EC + DC) Value added Group*
2014 2013 2014 2013 2014 2013
BMW Group 9,051 8,300 5,212 4,661 3,839 3,639
*
22
for these purposes corresponds to Group profit before Group forecast. This system enables an analysis of the
tax and adjusted for interest expense incurred in con- periodic reporting impact of project decisions on earn-
junction with the pension provision and on the finan- ings and rates of return over the term of each project.
cial liabilities of the Automotive and Motorcycles The overall result is a self-contained controlling model.
18 General Information on the BMW Group segments (earnings before interest expense and taxes).
18 Business Model
23 Report on Economic Position The cost of capital is the minimum rate of return ex-
pected by capital providers in return for the capital em-
Environment
26 Overall Assessment by Management ployed by the Group. Since capital employed comprises
Performance Indicators an equity capital element (e. g. share capital) and a debt
29 Review of Operations capital element (e. g. bonds), the overall cost of capital
Position and Net Assets rate is determined on the basis of the weighted average
61 Comments on Financial Statements rates for equity and debt capital, measured using stand-
of BMW AG
64 Events after the End of the ard market procedures. The pre-tax average weighted
Reporting Period
cost of capital for the BMW Group in 2014 was 12 %, un-
Opportunities changed from the previous year.
65 Outlook
82 Internal Control System and Risk Value management used to control projects
Operations in the Automotive and Motorcycles segments
rocess
83 Disclosures Relevant for Takeovers are influenced, to a large extent, by project work. Pro-
87 BMW Stock and Capital Markets jects have a substantial impact on future performance.
Project decisions are therefore a crucial component of
financial management for the BMW Group.
Decisions are taken on the basis of project calculations

measured in terms of the cash flows a project is expected
to generate. Calculations are made for the full term of
a project, i.e. for all future years in which the project
generates cash flows. Project decisions are taken on the
basis of the capital value and internal rate of return cal-
culated for the project.
The capital value of a project indicates the extent to

which a project will be able to generate a positive con
tribution to earnings over and above the cost of capital.
A project with a positive capital value enhances value
added and therefore results in an increase in the value
of the business. The internal rate of return of the project
corresponds to the average return on capital employed
in the project and, in terms of scope, is equivalent to the
multi-year average RoCE for an individual project. It is
therefore entirely consistent with the principal key per-
formance indicator used for the Automotive and Motor-
cycles segments.
The criteria used for taking decisions as well as the long-

term impact on periodic earnings is documented for
all project decisions and incorporated in the long-term
Report on Economic Position

General and Sector-specific Environment
General economic environment in 2014 only the impact of the severe winter that prevented an
Overall, the global economy grew by 3.3 % in 2014, with even better performance for the year as a whole. The
significant differences in growth rates recorded from upturn was driven once again primarily by the private
region to region. After a weak start, the USA performed sector, with the strongest stimulus coming from the
strongly over the year as a whole. The growth rate in employment and property markets. At the same time,
China remained at a relatively high level, despite a the downward pressure on public-sector budgets and
moderate slowdown in economic momentum. As a result the gradual scaling back of expansionary monetary
of the value added tax hike, Japan recorded a steeper policies held down growth in the US economy slightly.
drop in growth than had been expected. Even though
recession was overcome in Europe as a whole, the re- The Japanese economy was influenced by a mixture of
covery could hardly be described as dynamic, especially positive and negative factors in 2014, including a con-
in the major economies. The ongoing weak performance tinuation of highly expansionary monetary policies on
of some major emerging markets, in particular Brazil the one hand, and a hike in the value added tax rate in
and Russia, also held down the global growth rate. Al- April on the other. The overall outcome was that growth
though the Indian economy regained some momentum, slipped to 0.3 % in Japan in 2014.
the growth rate was still lower than in recent years.
With a slightly reduced growth rate of 7.4 %, China re-
In line with its previous announcements, the US Reserve mained by far the most dynamic of the world’s major
Bank brought its bond-buying programme to an end economies. By contrast, the performance of other major
during the year under report, resulting – in spring 2014 emerging economies was generally disappointing. India,
– in considerable turmoil for the currencies of some of for instance, managed a slightly improved growth rate
the world’s emerging market countries. However, so far, of 5.4 % in 2014, still trailing against growth rates re-
this first step to scale back its highly expansionary ported in previous years. Brazil and Russia grew by 0.2 %
monetary policy has not had a major adverse impact, and 0.6 % respectively, not far short of recession.
either in the USA or in other countries.
Currency markets
After a two-year lull, the eurozone returned to growth The US dollar averaged an exchange rate of 1.33 to the
in 2014, albeit at a modest rate of 0.8 %. The German euro in 2014, similar to the previous year’s level. How-
economy grew overall by 1.5 %. France was once again ever, the range of fluctuation was much greater, with
only able to report a very low growth rate of 0.4 %. Italy’s the US dollar initially losing value only then to surge
economy contracted for the third year in succession, during the second half of the year to finish at US dollar
this time at a less pronounced rate than in previous years 1.21 to the euro. The British pound also appreciated in
(– 0.4 %). By contrast, most of the other southern Euro- value, which is reflected in an annual average exchange
pean economies recovered well and recorded positive rate of 0.81 to the euro. These exchange rates were af-
growth again after years of recession. fected by the expectation of reference interest rate in-
creases in these two currency blocks in 2015, a develop-
As the largest European economy outside the eurozone, ment exacerbated by the European Central Bank’s
the United Kingdom saw a continuation of its run of decision to reduce interest rates again in 2014 and its
good quarterly figures and recorded a growth rate of announcement to loosen its monetary policies further.
2.6 % for the year as a whole. Although bolstered by With its value coupled to that of the US dollar, the an-
monetary and fiscal policies implemented on a massive nual average exchange rate of the Chinese renminbi
scale, it appears that the UK economy has now found (8.19 to the euro) remained at a similar level to the pre
a stronger footing to enable it to grow at a decent pace vious year. With fluctuations in exchange rates following
over a sustained period of time. the same pattern as the US dollar, the Chinese renminbi
also gained noticeably in value towards the end of the
The cyclical upturn in the USA gained further momen- year. In sharp contrast, the Japanese yen fell to an annual
tum in 2014. Although the reported growth rate of 2.4 % average rate of 140 yen to the euro in the wake of Japan’s
was similarly high compared to the previous year, it was monetary policy. Despite showing some signs of stabilising
24
Exchange rates compared to the euro

(Index: December 2009 = 100)
160
Russian Rouble
150
18 General Information on the BMW Group 140
18 Business Model
20 Management System 130
23 Report on Economic Position 120
Environment 110 Japanese Yen
26 Overall Assessment by Management 100
Performance Indicators 90 British Pound
29 Review of Operations US Dollar
80
49 Results of Operations, Financial Chinese
Position and Net Assets Renminbi
10 11 12 13 14
of BMW AG
Reporting Period Russian Rouble Japanese Yen British Pound US Dollar Chinese Renminbi
Opportunities Source: Reuters.
65 Outlook
over the course of the year, many emerging market

rocess Automobile markets
83 Disclosures Relevant for Takeovers currencies – such as those of India, Brazil and South The worldwide market for passenger cars and light com-
87 BMW Stock and Capital Markets Africa – lost further ground in 2014. The depreciation mercial vehicles grew once again in 2014, surpassing
of the Russian rouble was particularly pronounced at the threshold of 80 million vehicles for the first time
the beginning of the Ukraine crisis and then again
towards the end of the year, when it fell to a value of
Steel price trend
70.98 roubles to the euro. (Index: January 2010 = 100)
170
Energy and commodity prices 160
Oil prices plummeted during the second half of 2014. 150
Although the average price of Brent Crude oil during 140
the twelve-month period was only slightly down at 130
US dollar 100 per barrel, its price tumbled from over 120
US dollar 110 to around US dollar 55 per barrel within 110
a period of six months. The story was similar for WTI 100
Crude oil with an annual average price of approxi- 10 11 12 13 14
mately US dollar 93 per barrel. Generally speaking,
metal prices fell slightly during the course of the year. Source: Working Group for the Iron and Metal Processing Industry.
Oil price trend

Price per barrel of Brent Crude
120
110
100
90
80
70
Price in US Dollar
60
Price in €
50

10 11 12 13 14

Source: Reuters.
Precious metals price trend

250
225
Palladium
200
175
150
125
Gold
100
Platinum
75

10 11 12 13 14

Source: Reuters.
(+ 4.1 %). The two largest automobile markets, the while France and Italy both saw increases of 2.7 %. The
USA and China, again contributed strongly to this US market also developed positively (+ 1.8 %).
growth. New registrations in China were up by 13.0 %
to 18.4 million units, while the US market saw an in- Financial Services
crease of 6.0 % to 16.5 million units. The global economy continued to recover in 2014, despite
the existence of uncertainties which held down growth,
Registration figures in Germany showed a 2.9 % increase particularly in the first half of the year. A strong eco-
to 3.0 million units. The European car market (exclud- nomic rally in the USA in the second half of the year
ing Germany) grew by 6.6 % to a total of 10.0 million heralded a further tightening of monetary policies. The
registrations in 2014, the first increase posted since the US Reserve Bank’s bond-buying programme, which
financial crisis. France (1.8 million units; + 0.5 %) and had already been reduced in scale over the course of the
Italy (1.4 million units; + 4.6 %) both returned to robust year, was temporarily brought to a halt in October. The
growth after a number of years of contraction. However, Bank of Japan purchased government bonds in 2014,
among the major European markets, it was Spain that with the aim of keeping inflation above 2 % and stimu-
recorded the fastest growth rate (0.86 million units; lating the domestic economy. Within the eurozone, the
+ 18.4 %). The UK market also saw above-average growth European Central Bank (ECB) also endeavoured to
(+ 9.3 %) in 2014 with a total of 2.5 million new vehicles combat the risk of deflation by loosening its monetary
registered. policies further and reducing its reference interest rate
yet again. At the end of the year, the ECB’s reference
Despite the value added tax hike in April, the Japanese interest rate stood at a historical low of 0.05 %.
car market expanded by 3.2 % to 5.4 million units.
Bad debt levels either remained stable or improved
Car markets in the world’s major emerging economies slightly. The negative impact of some slight increases in
also suffered from the effects of generally weak economic risk, such as in Ukraine, have so far remained localised.
performance in these regions in 2014. The Russian mar-
ket contracted by 10.2 % to 2.3 million units, while the Price levels on the world’s used car markets in 2014
number of registrations in Brazil fell by 7.1 % to 3.3 mil- remained more or less stable across all regions, with
lion units. selling prices fluctuating within normal ranges.
Motorcycle markets
The worldwide market for 500 cc plus class motorcycles
grew in 2014 for the first time in several years (+ 4.9 %).
Despite ongoing economic uncertainties, motorcycle
registrations in Europe rose by 8.0 %. The motorcycles
market in Germany was 9.0 % up on the previous year,
26

Overall Assessment by Management
Financial and Non-financial Performance Indicators
Overall assessment by management As forecast for the financial year 2014, there was a solid
The 2014 financial year was a pleasing one for the BMW increase in the Group’s workforce, which was therefore
Group in overall terms and in line with our expectations. in line with our expectations.
The picture was also extremely positive in terms of
18 General Information on the BMW Group results of operations, financial position and net assets. Automotive segment
18 Business Model
This statement also takes into account events after the Sales volume
23 Report on Economic Position end of the reporting period. The BMW Group sold more cars in the year under report
than ever before. Despite a certain degree of volatility
Environment
26 Overall Assessment by Management Financial and non-financial performance indicators on various markets, sales of BMW, MINI and Rolls-Royce
Performance Indicators In the following section, we report on the principal finan brand cars as a whole rose by a solid 7.9 % to 2,117,9652
29 Review of Operations cial and non-financial performance indicators used as units (2013: 1,963,7982 units). This growth was achieved
Position and Net Assets the basis for managing the BMW Group and its segments. on the back of numerous new model launches on
61 Comments on Financial Statements As part of the review of operations and the financial international markets in 2014, thus ensuring that the
of BMW AG
64 Events after the End of the condition of the BMW Group, forecasts made in the pre- BMW Group remained the world’s market leader in the
Reporting Period
vious year are compared with actual outcomes. premium segment.
Opportunities
65 Outlook
BMW Group All three car brands made an important contribution to
82 Internal Control System and Risk Profit before tax this record sales volume performance. Sales of BMW
The BMW Group continued to perform extremely well and Rolls-Royce brand cars increased to 1,811,719 2 units
rocess
83 Disclosures Relevant for Takeovers in 2014 and achieved a new record Group profit before (2013: 1,655,1382 units; + 9.5 %) and 4,063 units (2013:
87 BMW Stock and Capital Markets tax of € 8,707 million (2013: € 7,8931 million; + 10.3 %). 3,630 units; + 11.9 %) respectively, in both cases setting
This result reflects the steep rise in the number of vehi- new records. With a sales volume of 302,183 units, the
cles sold. New models (such as the BMW X4) and new MINI brand was in line with previous year’s high level
series (such as the BMW 2 and 4 Series), combined with (2013: 305,030 units; – 0.9 %) despite the model change
a high-value model mix, ensured that the pre-tax profit in 2014.
continued to develop positively despite ongoing intense
competition on international car markets and consider- In line with the forecast provided for the full year in the
able levels of investment in new technologies. quarterly report to 30 September 2014, the total number
of vehicles sold by the BMW Group rose by a solid
As forecast for the financial year 2014, the Group’s profit 7.9 %. In the Annual Report 2013 a “significant rise” in
before tax rose significantly and was therefore in line deliveries to customers was predicted. The main reasons
with our expectations. for the difference were ongoing difficult political and
business conditions prevailing on some markets (such
Workforce at year-end as Russia) and shifts in the timing of production starts.
The BMW Group’s workforce increased to 116,324 em- Moreover, market developments in China did not quite
ployees during the year under report (2013: 110,351 em- live up to expectations.
ployees; + 5.4 %). This solid increase mainly reflects
strong demand for the Group’s cars and motorcycles, the
greater range of mobility services now offered and the 1
rior year figures have been adjusted in accordance with IAS 8, see note 9.
P
need for additional qualified staff in conjunction with 2
henyang (2013:
the development of electromobility. 198,542 units, 2014: 275,891 units).
Fleet carbon emissions

1
The return on capital employed (RoCE) amounted to
The BMW Group is continually reducing the carbon 61.7 % (2013: 63.02 %). Contrary to our original ex
emissions of its fleet of vehicles by equipping them with pectations, the RoCE decreased only slightly due to
highly efficient engines and electrified drivetrain sys- improved management of capital employed and the
tems. Thanks to the rigorous deployment of Efficient increase in service contract volumes. In the Annual
Dynamics technologies, our vehicles also set standards Report 2013 a “significant drop” in RoCE was pre-
in terms of dynamism and driving pleasure. dicted. The rate achieved was well above the minimum
target of 26 % referred to in the forecast for 2014.
In 2014, the volume of carbon emissions produced by
our vehicle fleet sold in Europe1 decreased slightly to Motorcycles segment
130 grams CO2 / km (2013: 133 grams CO2 / km; – 2.3 %). Sales volume
The scale of the decrease in fleet emissions in 2014 In a friendlier-than-expected market environment, BMW
was therefore not as pronounced as originally forecast, Motorrad achieved a solid increase of 7.2 % with a sales
mainly reflecting the impact of a higher-value model volume of 123,495 units (2013: 115,2153 units). This per-
mix on the one hand and the later-than-planned avail- formance was therefore better than the “slight increase”
ability of the new MINI on the other. In the Annual forecast in the Annual Report 2013. The forecast was
Report 2013, we had forecast a “moderate decrease” for raised to “solid” in the quarterly report to 30 September
the financial year 2014. 2014.
Revenues Return on capital employed

Revenues from the sale of BMW, MINI and Rolls-Royce The return on capital employed (RoCE) in the Motor
brand cars grew by 6.4 % to € 75,173 million (2013: cycles segment stood at 21.8 % (2013: 16.4 %). The solid
€ 70,630 2 million) in line with the solid sales volume increase in RoCE from motorcycles business reflects
rise. The increase was primarily attributable to the nu- higher-than-expected sales volume, the high-value
merous new models launched and the positive con- model mix and the first fruits of the segment’s strategic
sumer climate in major markets. realignment. In the Annual Report 2013, it was pre-
dicted that the RoCE would be on par with the previous
As forecast for the full year in the Quarterly Report to year.
30 June 2014, automobile business revenues had a solid
increase despite the dampening effect of exchange Financial Services segment
rates which had been mentioned in the previous year’s Return on equity
annual outlook as a potentially negative factor. In the The Financial Services segment generated a return on
Annual Report 2013 a “significant increase” in revenues equity (RoE) of 19.4 % in 2014 (2013: 20.0 2 %), reflecting
was predicted. continued favourable business conditions. The RoE was
therefore at a similar level to the previous year and re-
EBIT margin and return on capital employed mained above the target level of 18 %, in line with our
The EBIT margin for the Automotive segment (profit forecast for 2014. In the Annual Report 2013, a “slight
before financial result divided by revenues) came in at decrease” in RoE was predicted. The main reason for
9.6 % (2013: 9.4 %) as a result of the high-value model
mix. As forecast for the financial year 2014, the EBIT
margin from automobile business was within the target 1
EU-28.
range of between 8 and 10 % and thus in line with our 2
expectations. 3
Plus an additional 1,110 Husqvarna motorcycles (until 5 March 2013).
28
the better-than-expected RoE performance was the The following overall picture arises for the principal
stable risk situation, particularly in the area of residual performance indicators utilised by the BMW Group and
values. its segments:
18 COMBINED M ANAGEMENT REPORT
23 Report on Economic Position Comparison of 2014 forecasts with actual outcomes 2014
Environment
26 Overall Assessment by Management Forecast for 2014 Forecast revision Actual outcome
26 Financial and Non-financial in 2013 Annual Report during the year in 2014
Performance Indicators
29 Automotive Segment
BMW Group
35 Motorcycles Segment
36 Financial Services Segment Profit before tax significant increase € million 8,707 (+ 10.3 %)
38 Research and Development
40 Purchasing
Workforce at year end solid increase 116,324 (+ 5.4 %)
41 Sales and Marketing
44 Workforce
45 Sustainability Automotive segment
49 Results of Operations, Financial Sales volume1 significant increase Q3: solid increase units 2,117,965 (+ 7.9 %)
Position and Net Assets 2
61 Comments on Financial Statements Fleet emissions moderate decrease Q3: slight decrease g CO2 / km 130 (– 2.3%)
of BMW AG Revenues significant increase Q2: solid increase € million 75,173 (+ 6.4 %)
Reporting Period EBIT margin target range between 8 and 10 % % 9.6 (+ 0.2 %pts)
Return on capital employed significant decrease % 61.7 (– 1.3 %pts)
Opportunities
Motorcycles segment
Consolidated Financial Reporting P rocess
83 Disclosures Relevant for Takeovers Sales volume slight increase Q3: solid increase units 123,495 (+ 7.2 %)
Return on capital employed in line with last year’s level % 21.8 (+ 5.4 %pts)

Return on equity slight decrease % 19.4 (– 0.6 %pts)
1 Including the joint venture BMW Brilliance Automotive Ltd., S

henyang (2014: 275,891 units).
2
EU-28.

Review of Operations
AUTOMOTIVE SEGMENT
More than 2 million vehicles sold for the first time BMW Group – key automobile markets 2014
The BMW Group sold a total of 2,117,965* BMW, MINI as a percentage of sales volume
and Rolls-Royce brand vehicles in 2014, thus surpassing
the two-million mark for the first time in its history
(2013: 1,963,798* units; + 7.9 %). All three brands con- Other China*
tributed to these excellent figures and helped the BMW
Group to retain its pole position in the premium seg-
ment worldwide. Sales of BMW brand cars were 9.5 %
up on the previous year (2014: 1,811,719* units; 2013: USA
Japan
1,655,138* units). Despite the model change of its Italy
best-selling model, the MINI Hatch, the MINI brand France
achieved a sales volume of 302,183 units, almost match- Great Britain Germany
ing the previous year’s high level (2013: 305,030 units;
– 0.9 %). Rolls-Royce Motor Cars sold 4,063 ultra-luxury
sedans, surpassing the previous year’s strong sales per- China* 21.6 France 3.2
formance by 11.9 % (2013: 3,630 units). USA 18.7 Italy 3.0
Germany 12.9 Japan 3.0
Double-digit sales volume growth in Asia Great Britain 9.7 Other 27.9
Markets in Asia continued to develop dynamically in
2014. Sales of BMW, MINI and Rolls-Royce brand
vehicles in this region rose significantly (+ 13.8 %) to
658,384* units (2013: 578,678* units). China again which the USA accounted for 396,961 units, 5.4 % up on
accounted for the lion’s share with a sales volume of the previous year (2013: 376,636 units). Thanks to the
456,732* units (2013: 391,713* units; + 16.6 %). The more stable market environment in Europe, sales of the
number of vehicles sold in the Americas region climbed Group’s three brands grew by 6.4 % to 914,587 units (2013:
by 4.0 % to 482,257 units (2013: 463,822 units), of 859,546 units). The number of vehicles sold in Germany
BMW Group sales volume of vehicles by region and market

in 1,000 units
2,200
Europe
2,000
1,800
1,600
1,400 thereof Germany
1,200 Asia*
1,000 thereof China*
800
600
Americas
400 thereof USA
200
Other markets
10 11 12 13 14
Europe 791.2 858.4 865.4 859.5 914.6

thereof Germany 267.2 285.3 287.4 259.2 272.3
Asia* 286.3 375.5 493.4 578.7 658.4
thereof China* 169.6 233.6 327.3 391.7 456.7
Americas 329.7 380.3 425.3 463.8 482.3
thereof USA 266.6 306.3 348.5 376.6 397.0
Other markets 54.0 54.8 61.1 61.8 62.7
Total 1,461.2 1,669.0 1,845.2 1,963.8 2,118.0
*
30
rose by 5.1 % to 272,345 units (2013: 259,219 units). The part of the BMW 4 Series since the end of 2013. For this
BMW Group also performed extremely well in Great reason, reported sales of the 3 Series in 2014 went
Britain, with sales rising to a total of 205,071 units (2013: down by 4.0 % to 480,214 units (2013: 500,332 units).
189,121 units; + 8.4 %). The BMW 4 Series has been highly successful since its
18 General Information on the BMW Group launch, with 119,580 units sold in the year under re-
BMW* retains pole position in the premium segment port (2013: 14,763 units). A total of 373,053 customers
Environment The BMW brand maintained its pole position in the opted for the BMW 5 Series (2013: 366,992 units; + 1.7 %).
premium segment during the year under report. Signifi-
Performance Indicators cant contributions to this achievement were made by The BMW X family also continued to perform well in
29 Automotive Segment the highly successful BMW X5 as well as the BMW 3, 4 2014. Following the launch of the third generation in
35 Motorcycles Segment and 5 Series, each of which was market leader in its November 2013, sales of the BMW X5 rose by more than
36 Financial Services Segment
38 Research and Development relevant segment. a third to 147,381 units (2013: 107,231 units; + 37.4 %).
40 Purchasing The BMW X3 recorded a sales volume of 150,915 units,
44 Workforce At 190,033 units, sales of the BMW 1 Series were down therefore not quite matching the previous year’s high
45 Sustainability
on the previous year’s level (2013: 213,611 units; – 11.0 %), level (2013: 157,303 units; – 4.1 %). Similarly, the BMW X1
Position and Net Assets reflecting the fact that the Coupé and Convertible sales volume figure of 156,471 units was slightly lower
of BMW AG
body variants are now reported as part of the 2 Series. than one year earlier (2013: 161,353 units; – 3.0 %). The
64 Events after the End of the Similarly, the Convertible and Coupé models previously new X4 became available in July 2014 and achieved a
included in the BMW 3 Series have been reported as sales volume of 21,688 units by the end of the year.
Reporting Period
Opportunities
Consolidated Financial Reporting P rocess Sales volume of BMW vehicles by model variant*
in units
87 BMW Stock and Capital Markets 2014 2013 Change Proportion of
in % BMW sales volume
2014 in %
BMW 1 Series 190,033 213,611 – 11.0 10.5

BMW 2 Series 41,038 – – 2.3
BMW 3 Series 480,214 500,332 – 4.0 26.5
BMW 4 Series 119,580 14,763 – 6.6
BMW 5 Series 373,053 366,992 1.7 20.6
BMW 6 Series 23,988 27,687 – 13.4 1.3
BMW 7 Series 48,519 56,001 – 13.4 2.7
BMW X1 156,471 161,353 – 3.0 8.6
BMW X3 150,915 157,303 – 4.1 8.3
BMW X4 21,688 – – 1.2
BMW X5 147,381 107,231 37.4 8.1
BMW X6 30,244 36,688 – 17.6 1.7
BMW Z4 10,802 12,866 – 16.0 0.6
BMW i 17,793 311 – 1.0
BMW total 1,811,719 1,655,138 9.5 100.0
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2013: 198,542 units, 2014: 275,891 units).
MINI at previous year’s level

The sales performance of the MINI brand in 2014 was report (2013: 305,030 units; – 0.9 %), with sales of the
influenced by the market launch of the third-genera- new MINI Hatch up by 9.0 % at 140,051 units (2013:
tion Hatch. The BMW Group delivered 302,183 MINI 128,498 units) and sales of the MINI Countryman up by
brand cars to customers worldwide in the period under 5.0 % at 106,995 units (2013: 101,897 units).
Sales volume of MINI vehicles by model variant

in units
2014 2013 Change Proportion of
in % MINI sales volume
2014 in %
MINI Hatch 140,051 128,498 9.0 46.3

MINI Convertible 17,327 21,167 – 18.1 5.7
MINI Clubman 13,326 21,030 – 36.6 4.4
MINI Countryman 106,995 101,897 5.0 35.4
MINI Coupé 3,816 8,436 – 54.8 1.3
MINI Roadster 5,101 9,315 – 45.2 1.7
MINI Paceman 15,567 14,687 6.0 5.2
MINI total 302,183 305,030 – 0.9 100.0
More than 4,000 Rolls-Royce sold for the first time

Rolls-Royce Motor Cars remained market leader in the Rolls-Royce Wraith, which became available in autumn
ultra-luxury segment in 2014. With 4,063 units sold, 2013, achieved sales volume of 1,906 units (2013:
the brand surpassed the 4,000-unit sales volume thresh- 492 units). 1,555 units of the Rolls-Royce Ghost were
old for the first time (2013: 3,630 units; + 11.9 %). The sold worldwide (2013: 2,284 units; – 31.9 %).
Sales volume of Rolls-Royce vehicles by model variant

in units
2014 2013 Change in %
Phantom 602 854 – 29.5

Ghost 1,555 2,284 – 31.9
Wraith 1,906 492 –
Rolls-Royce total 4,063 3,630 11.9
Production network running at full pace More than one million vehicles produced in Germany
The most important events in the BMW Group’s pro- for fourth consecutive year
duction network during the year under report were the For the fourth year in a row, the BMW Group manu
numerous model start-ups, the beginning of series pro- factured over one million vehicles at its German plants.
duction for the BMW i8 and the further expansion of Around 950 vehicles rolled off production lines per
our international manufacturing network, which grew working day at the Group’s main plant in Munich, in-
to a total of 30 sites in 14 countries and set new records cluding the BMW 3 Series Sedan, the BMW 3 Series
in terms of production volumes. Touring, the BMW 4 Series Coupé and, since February,
the BMW M4 Coupé.
Due to the brisk demand on international car markets,
in 2014 production volume rose to 2,165,566* units (2013: In Dingolfing, production reached all-time high levels,
2,006,366* units; + 7.9 %), comprising 1,838,268* BMW with an average of around 1,600 units manufactured per
(2013: 1,699,835*; + 8.1 %), 322,803 MINI (2013: 303,177;
+ 6.5 %) and 4,495 Rolls-Royce (2013: 3,354; + 34.0 %) *
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang
brand cars. (2013: 214,920 units, 2014: 287, 466 units).
32
Vehicle production of the BMW Group by plant

in units
2014 2013 Change Proportion of
in % production in %
Munich 228,126 247,330 – 7.8 10.5
Environment Dingolfing 369,027 342,629 7.7 17.0
Regensburg 272,015 295,417 – 7.9 12.6
Performance Indicators Leipzig 211,434 186,695 13.3 9.8
Rosslyn 68,771 65,646 4.8 3.2
35 Motorcycles Segment Spartanburg 349,949 297,326 17.7 16.2
38 Research and Development Dadong1 143,390 126,888 13.0 6.6
40 Purchasing Tiexi 1 144,076 88,032 63.7 6.7
44 Workforce Oxford 179,318 175,986 1.9 8.3
45 Sustainability Graz (Magna Steyr) 2 113,401 125,559 – 9.7 5.2
Position and Net Assets Born (VDL Nedcar) 2 29,196 – – 1.3
Goodwood 4,495 3,354 34.0 0.2
of BMW AG
64 Events after the End of the Assembly plants 52,368 51,504 1.7 2.4
Reporting Period
BMW Group 2,165,566 2,006,366 7.9 100.0
Opportunities
82 Internal Control System and Risk 1
Joint venture BMW Brilliance Automotive Ltd., Shenyang.
Management System Relevant for the 2
Contract production.
Consolidated Financial Reporting P rocess
day and almost 370,000 over the full year under report. At the Regensburg plant, production of the BMW M3
Production of the BMW 4 Series Gran Coupé began in Sedan began in February and the first BMW M4
February. Assembly lines at the Dingolfing plant are C onvertible models were manufactured there in July.
therefore now making a total of 17 models, belonging to The enlargement of the pressing plant was completed
five different BMW series. In February the plant cele- and the bodymaking facility expanded to include a
brated a production record following construction of second production line. At the same time, a new supply
the nine-millionth BMW car at that location. As part of centre went into operation.
the plant’s modernisation, measures in 2014 included
further work on new bodymaking facilities at the site. A The BMW Group plant in Wackersdorf celebrated its
new supply centre for vehicle assembly, a high-speed 25th anniversary in 2014. In July, a new building and a
servo press and a production facility for axle brackets new production facility for processing CFRP matting
were all put into operation. Two new production lines was taken into service.
were added in October to manufacture high-voltage
power storage systems and electric motors for the BMW Expansion work at the Eisenach plant also began in
Group’s future plug-in hybrids. July. The existing buildings and production floor space
are due to be enlarged to accommodate future vehicle
The Leipzig plant continued to recruit new personnel projects and new technologies. Moreover, a state-of-the-
in order to keep pace with the increased expertise and art servo press is being installed.
manpower capacity needed, both for BMW i models
and for conventional production. In July, the four-thou- The components plant in Landshut is making the electric
sandth employee was welcomed to the plant. In May, motor, the complete plastic outer skin, CFRP structural
series production of the BMW i8 commenced, followed body parts and lightweight metal die-cast parts for the
by the BMW 2 Series Active Tourer in July. In October, BMW i8 hybrid sports car. The plant’s lightweight die-
the 1.5-millionth BMW was manufactured at the plant cast metal facilities celebrated their 25th anniversary in
since production first began in 2005. Production of the 2014 and remain the only unit within the BMW Group
BMW 2 Series Convertible began in November. producing such parts. The components plant has adopted
a new, energy-saving strategy to optimise energy manage- third production building. It should be ready to begin
ment. Since 2014, the waste heat from the melting operations by the beginning of 2015 and offers additional
plant has been fed into the site’s own in-house hot water capacity for two production lines capable of handling a
system, which means it can be used for heating in win- total volume of 3,000 tonnes per year.
ter and cooling in summer.
In a parallel development, the BMW Group has built an
Global presence strengthened assembly plant in Araquari, Brazil. The first vehicles
During the year under report, 48.5 % of the BMW Group’s were produced at the location in October 2014. The new
vehicles were manufactured abroad. The BMW 5 Series production facility will be fully completed in the course
long-wheelbase Sedan is manufactured at the Dadong 1 of 2015. The manufacturing infrastructure will then
plant in China. The 500,000th vehicle was produced at comprise bodymaking, painting and assembly. Manu-
the plant in March 2014, while at the engine manufac- facturing capacity is scheduled to reach up to 30,000 vehi-
turing plant in Shenyang, the 400,000th 4-cylinder petrol cles per year. The production portfolio currently com-
engine was being produced for the Chinese market. At prises the BMW 3 Series and the X1. The BMW 1 Series,
the same time, preparations were initiated at the Tiexi1 the X3 and the MINI Countryman are scheduled to fol-
plant for a new engine manufacturing facility, including low in the course of 2015.
a foundry, to supply local production capacities. It is
due to begin production in 2016. The first BMW 316Li At the Group’s various assembly plants, which mostly
was manufactured at the Tiexi1 plant in October. serve their regional markets, 52,368 vehicles were
produced overall during the period under report. The
At the Rosslyn manufacturing plant in South Africa, plants are located in Araquari (Brazil), Rayong (Thailand),
the BMW Group concluded a contract with the energy Chennai (India), Kaliningrad (Russia), Cairo (Egypt),
company Bio2Watt (Pty) Ltd. Under its terms, from Jakarta (Indonesia) and Kulim (Malaysia).
2015 onwards some 25 to 30 % of the plant’s electricity
requirements will be generated by a combined heat and Thirteen years after the relaunching of the MINI brand in
power plant that runs on landfill gas. The biogas used 2001, the three-millionth vehicle has meanwhile rolled
will be recovered from the treatment of waste. off the assembly lines at the Oxford plant. During this
period, two million of the MINI brand cars manufac-
Almost 350,000 vehicles were manufactured at the tured in the UK have been exported to over 110 coun-
US plant in Spartanburg in 2014 – a new record for the tries around the world. The British production triangle
location. To coincide with the production plant’s 20th comprising the MINI plant in Oxford, the components
anniversary, in March the BMW Group announced ex- plant in Swindon and the engine production facility
pansion plans. Its manufacturing capacity is scheduled in Hams Hall is a key part of the BMW Group’s produc-
to be raised to 450,000 vehicles per year. To date, the tion network. More than 900 units of the MINI are pro-
BMW X3, X5, X5 M, X6 and X6 M models have been duced at the Oxford plant per day during peak times.
manufactured at the competence centre for X vehicles.
Furthermore, production of the BMW X4 commenced In order to secure greater capacity for planned growth,
at the site in April. In October, a second painting facility since July the MINI Hatch is also being produced at
was also commissioned at the plant. the Dutch carmaker VDL Nedcar bv in Born, the
Netherlands, under the terms of a contract with the
In July 2014 the construction of a new plant in San Luis BMW Group. These new arrangements enable even
Potosí, Mexico, was announced. The scheduled annual greater flexibility for the BMW Group’s production net-
capacity of this plant is approximately 150,000 units. work worldwide. The MINI models Countryman and
This move underpins the BMW Group’s strategic com- Paceman are already being produced under contract by
mitment to maintaining a well-balanced global value- Magna Steyr Fahrzeugtechnik (MSF) in Graz, Austria. In
added chain.
At Moses Lake2, Washington (USA), the carbon fibre 1

Joint venture BMW Brilliance Automotive Ltd., Shenyang.
manufacturing facility has been enlarged to include a 2
Joint operation SGL Automotive Carbon Fibers.
34
May 2014, MSF manufactured its one-millionth vehicle upstream preparation staff with the best possible
for the BMW Group. s upport. One good example is the innovative coopera-
tion between staff and robots in the Spartanburg and
The pressing plant in Swindon produces bodywork Dingolfing plants, by which people and robots work
18 General Information on the BMW Group components and assemblies for the Oxford plant. Since together effectively side by side.
July the plant has also supplied the MINI contract pro-
Environment duction facilities at VDL Nedcar with body parts and
the Leipzig plant with pressed parts for the BMW 2 Se-
Performance Indicators ries Active Tourer.
35 Motorcycles Segment During the third quarter, series production of the
38 Research and Development Rolls-Royce Ghost Series II commenced at the Rolls-Royce
40 Purchasing plant in Goodwood (UK). Construction of a technology
44 Workforce and logistics centre for the plant was also announced.
45 Sustainability
The Goodwood plant meanwhile provides jobs for more
Position and Net Assets than 1,500 people, 100 of whom took up their posts
of BMW AG
during the period under report.
The engine plants in Munich, Hams Hall (UK) and Steyr

Reporting Period
Opportunities (Austria) have continued to introduce a highly flexible,
Management System Relevant for the demand-oriented production system. In June, the engine
Consolidated Financial Reporting P rocess production plant in Munich officially gave the green
and Explanatory Comments light for a production line for modular engines. In future,
the Group’s main plant will therefore act internationally
as the leading plant for the production of the 3- and
4-cylinder petrol engines that form part of the Efficient
Dynamics family. The Munich plant produces up to
3,200 engines each day, 1,000 of which are modular. The
range comprises BMW 3-, 4-, 8- and 12-cylinder petrol
engines, BMW 6-cylinder diesel engines, and 8-cylinder
high-performance engines for the BMW M models. In
October, the engine plant in Steyr also launched a pro-
duction line for low-fuel-consumption 3- and 4-cylinder
modular engines. In what is currently the largest engine
plant operated by the BMW Group, up to 4,700 engines
are completed each day. The diesel engine development
centre, which is connected to the plant, is currently being
enlarged. The Hams Hall engine plant makes 3- and
4-cylinder petrol engines for BMW and MINI and is also
the exclusive manufacturer of 3-cylinder petrol engines
for the BMW i8.
Pilot projects for “Industrie 4.0” launched

During the year under report, the BMW Group initiated
new projects within its production network which will
ultimately pave the way towards the first intelligent plant.
The objective is to deploy new technologies as sensibly
as possible with the aim of providing production and
MOTORCYCLES SEGMENT
Solid sales volume growth for BMW Motorrad BMW Group – key motorcycle markets 2014
The Motorcycles segment profited from a positive market as a percentage of sales volume
environment during the period under report. In total,
we sold 123,495 BMW motorcycles worldwide (2013: Germany
115,2151; + 7.2 %) and therefore outperformed the market

as a whole. Other
USA
Motorcycle sales up in all markets
The number of motorcycles sold in Europe rose to 73,611
units (2013: 68,961 units), a solid growth rate of 6.7 %. Spain
France
With a sales volume of 21,714 units, business in Germany Great Britain Italy
Brazil
edged up slightly on the previous year (2013: 21,473 units;
+ 1.1 %). Motorcycle sales were also slightly higher (+ 2.5 %)
in Italy, with 10,487 units handed over to customers Germany 17.6 Brazil 6.1
(2013: 10,230 units). Significant growth was achieved in USA 12.4 Great Britain 5.5
France, however, where we recorded a sales volume of France 9.4 Spain 5.0
11,600 units (2013: 10,400 units; + 11.5 %). Motorcycle Italy 8.5 Other 35.5
sales in the USA, at 15,301 units, grew solidly compared
to the previous year (2013: 14,100 units; + 8.5 %).
The new R 1200 RS succeeds in combining the qualities
BMW Motorrad enters world of electromobility of a touring bike with the dynamic performance of a
In May 2014, the arrival of the new C evolution marked sports machine. The new R 1200 R continues in the tra-
the beginning of a new chapter in the urban mobility dition of a “purist” BMW roadster combined with a tried-
segment for BMW Motorrad. The new electrically pow- and-tested boxer engine. The new models will become
ered scooter fuses riding fun and dynamism with the available in spring 2015, in good time for the start of the
benefits of zero-emissions performance to create a whole motorcycle season. BMW Motorrad also presented two
new experience on two wheels. more new models at the EICMA Motorcycles Exhibition
in Milan – the S 1000 XR and the F 800 R. The S 1000 XR
The new R nineT, S 1000 R, R 1200 RT, R 1200 GS Adven- unites dynamic touring qualities, sporty performance
ture and K 1600 GTL Exclusive models presented in au- and high levels of comfort with outstanding everyday
tumn 2013 were all launched in time for the start of usability. The new F 800 R Roadster offers sporty perfor-
the season in March 2014. Important contributions to mance, agile handling and even greater versatility.
BMW Motorrad’s success were made in particular by the
R 1200 GS Adventure and R 1200 RT models. The new BMW Motorrad’s new brand strategy
R nineT generated a highly positive response among cus- The BMW Group launched its new brand strategy for BMW
tomers and media alike. Motorrad at the INTERMOT international motorcycle
show. The brand’s new motto – MAKE LIFE A RIDE –
Three BMW motorcycles celebrated their world premieres equates motorcycle riding with the joy of living. People
at the INTERMOT in Cologne: the S 1000 RR, the R 1200 R tell their (life) stories in a documentary style and, by air-
and the R 1200 RS. The latest version of the S 1000 RR ing their emotions regarding all aspects of the motor
Supersports bike has an even better weight-to-power ra- cycle, raise enthusiasm worldwide for motorcycle riding.
tio and a whole host of integrated technical innovations.
Motorcycle production volume significantly up
on previous year
BMW sales volume of motorcycles2 In total, 133,615 BMW motorcycles were manufactured
in 1,000 units during the period under report (2013: 110,1273 units;
120
+ 21.3 %), with the sharp increase primarily reflecting
100
the production starts of a number of new models. Up to
80
600 motorcycles (from various series) and maxi-scooters
60
are manufactured each day at the motorcycles plant in
40
Berlin. BMW Motorrad also continued to expand the in-
20
ternational reach of its production activities. Local motor-

cycle assembly facilities, such as those in Brazil and
10 11 12 13 14
Thailand, are becoming increasingly important.
1
98.0 104.3 106.4 115.2 123.5 2
Excluding Husqvarna, sales volume up to 2013: 59,776 units.
3
36
FINANCIAL SERVICES SEGMENT
Financial Services segment remains on growth course In the used car financing line of business, 334,289 new
The Financial Services segment achieved its best figures contracts for BMW and MINI brand cars were signed
to date in 2014, despite a difficult market environment. in 2014, 5.8 % more than in the previous year (2013:
4,359,572 lease and credit financing contracts were in 315,919 contracts).
18 General Information on the BMW Group place with dealers and retail customers at the end of the
reporting period (2013: 4,130,002 contracts; + 5.6 %). The total volume of all new credit and leasing contracts
Environment Business volume in balance sheet terms grew by 14.3 % concluded with retail customers during the twelve-
to stand at € 96,390 million (2013: € 84,347 million). month period under report amounted to € 41,318 mil-
Performance Indicators lion, an increase of 5.3 % (2013: € 39,241 million).
29 Automotive Segment The Financial Services segment is represented in more
35 Motorcycles Segment than 50 countries, serving the dealer organisation as a The increase in new retail customer business is reflected
38 Research and Development strong and reliable partner. Credit financing and the in the overall contract portfolio. In total, 4,005,428 con-
40 Purchasing lease of cars and motorcycles to retail and business cus- tracts were in place with retail customers at 31 December
44 Workforce tomers is the segment’s largest line of business. Multi- 2014 (2013: 3,793,768 contracts; + 5.6 %). As in previous
45 Sustainability
brand business, operated under the brand name years, growth was recorded across all regions, with in-
Position and Net Assets “Alphera”, also covers the financing of vehicles of other creases in the Europe / Middle East / Africa region (+ 6.5 %),
of BMW AG
manufacturers. The Financial Services segment offers the Americas region (+ 4.0 %) and for the EU Bank (+ 0.4 %).
64 Events after the End of the fleet business services under the brand name “Alphabet”. The most significant rise was again recorded in the
It also supports the Group’s dealer organisation by Asia / Pacific region, where the contract portfolio grew
Reporting Period
Opportunities providing financing for dealership vehicle inventories, by 20.1 %.
Management System Relevant for the real estate and equipment. Supplementing its lease
Consolidated Financial Reporting P rocess and credit financing business, the segment also offers Further growth of fleet business
and Explanatory Comments its customers selected insurance and banking services. Alphabet, with its wide range of multi-brand products,
is one of the top four fleet service providers in Europe.
New business up again on previous year Alongside fleet management and financing, the broad
Credit financing and leasing business with retail cus- product range also includes full service leasing. In total,
tomers once again made a significant contribution a portfolio of 555,349 fleet vehicle contracts was being
to the segment’s success in 2014. In total, 1,509,113 managed at the end of the reporting period, up slightly by
new contracts were signed during the reporting period, 3.7 % compared to one year earlier (2013: 535,528 con-
slightly more (+ 2.6 %) than one year earlier (2013: tracts).
1,471,385 contracts).
Decrease in multi-brand financing
Leasing business grew year-on-year by 5.2 %, credit The volume of multi-brand financing decreased mod-
financing by 1.2 %. As a proportion of new business, erately in 2014. Against the background of continued
leasing accounted for 34.7 % and credit financing for profitable portfolio growth and greater competition,
65.3 %. The proportion of new BMW Group cars leased the number of new contracts fell by 8.7 % to stand at
or financed by the Financial Services segment was 165,776 contracts (2013: 181,605 contracts). A portfolio
41.7 %, 2.3 percentage points lower than in the pre of 465,702 contracts (2013: 452,009 contracts; + 3.0 %)
vious year (2013: 44.0 %). was in place at 31 December 2014.
Contract portfolio of Financial Services segment BMW Group new vehicles financed by
in 1,000 units Financial Services segment
4,400 in %
4,200 50
4,000 40
3,800 30
3,600 20
3,400 10
3,200
10 11 12 13 14
10 11 12 13 14
Financing 24.1 20.0 20.7 22.5 20.8
3,190 3,592 3,846 4,130 4,360 Leasing 24.1 21.1 19.7 21.5 20.9

Contract portfolio retail customer financing of period under report (2013: 1,041,530 contracts; + 4.2 %).
Financial Services segment 2014 Overall, the portfolio increased to 2,874,158 contracts
as a percentage by region (2013: 2,567,168 contracts; + 12.0 %).
Risk profile
Asia / Pacific
The positive trend in the global economy and a some-
Americas
what quieter period in the euro crisis enabled the risk
profile relevant for the Financial Services segment’s
Europe / Middle total portfolio to improve again in 2014. Moreover, the
East / Africa
segment’s well-established procedures for managing
credit risks continued to prove their worth. At 0.50 %, the
overall credit loss ratio remained at a stable, low level
EU Bank
(2013: 0.46 %). Reflecting the generally stable conditions
prevailing on international used car markets, sales prices
for our pre-owned cars developed robustly. Average re-
Americas 30.4 Europe / Middle East / Africa 25.1 sidual value losses incurred on the resale of our vehicles
EU Bank 29.8 Asia / Pacific 14.7 remained stable at the previous year’s level.

Further information with respect to risks and opportu-
nities related to Financial Services can be found in the
Dealer financing significantly up on previous year section “Report on risks and opportunities”.
The total volume of dealer financing amounted to
€ 14,710 million at the end of the reporting period, 12.2 %
higher than one year earlier (2013: € 13,110 million).
Deposit business volume at previous year’s level

Deposit-taking represents an important element in the
BMW Group’s refinancing strategy. The volume of cus-
tomer deposits worldwide at the end of the reporting
period stood at € 12,466 million and thus on par with
the previous year (2013: € 12,457 million; + 0.1 %).
Insurance business continues to grow

The Financial Services segment also operates an insur-
ance line of business. In addition to its financing and
leasing products, we also offer a wide range of insurance
coverage, addressing all aspects of individual mobility.
Demand for our insurance products remained high in
2014, with 1,085,781 new contracts signed during the
Development of credit loss ratio

in %
0.7
0.6
0.5
0.4
0.3
0.2
0.1

10 11 12 13 14

0.67 0.49 0.48 0.46 0.50

38
RESEARCH AND DEVELOPMENT
Research and development play a vital role for the BMW the new engine family during the first half of 2014. Due
Group, given its broad range of products and the high to commonalities in the design of our petrol and diesel
number of new models. Our vehicles and services also engines, the percentage of identical parts used can be as
set standards in terms of connecting car occupants high as 60 %, while the structural similarities between
18 General Information on the BMW Group with the outside world. During 2014, a total of 11,779 petrol and diesel engines are around 40 %.
employees were engaged throughout the BMW Group’s
Environment global research and innovation network at twelve loca- The BMW i8 combines the driving performance of a
tions spread over five countries, to deliver the best sports car with the fuel consumption of a compact-class
Performance Indicators product quality possible and develop innovative tech- model. The plug-in hybrid system developed for the
29 Automotive Segment nologies for customers. BMW i8 meets the very highest specifications in terms
35 Motorcycles Segment of driving dynamics, efficiency, practical usefulness
38 Research and Development Research and development expenditure for the year de- and quality, thus underlining the BMW Group’s techno-
40 Purchasing creased by 4.7 % to € 4,566 million (2013: € 4,793* mil- logical leadership in the field of drive system develop-
44 Workforce lion). The research and development ratio was 5.7 %, ment. In the long term, the BMW Group also plans to
45 Sustainability
0.6 percentage points lower than in the previous year transfer eDrive technology to other core brand models.
Position and Net Assets (2013: 6.3 %). The ratio of capitalised development costs
of BMW AG
to total research and development costs for the period The BMW 3 Series plug-in hybrid prototype unveiled in
64 Events after the End of the (capitalisation ratio) was 32.8 % (2013: 36.4 %). Amortisa- 2014 provides a preview of how extreme efficiency can
tion of capitalised development costs totalled € 1,068 mil- be combined with ultimate driving pleasure in the world’s
Reporting Period
Opportunities lion (2013: € 1,069 million). Further information on re- most successful premium-class sedan. The prototype
Management System Relevant for the search and development expenditure is provided in the features a 4-cylinder petrol engine from the new Efficient
Consolidated Financial Reporting P rocess section “Results of Operations, Financial Position and Dynamics family with TwinPower turbo technology
and Explanatory Comments Net Assets” and in note 11 to the Group Financial State- combined with an electric drive system. The outcome is
ments. a car that delivers sporty driving dynamics similar to
being behind the wheel of a conventionally powered
Drive concepts: setting the course for the future 6-cylinder BMW 3 Series model, but with far lower fuel
In line with our commitment to Efficient Dynamics, we consumption. The possible integration of a plug-in
are working continuously to optimise both our range h
ybrid system is already a firm part of our thinking when
of combustion engines featuring TwinPower turbo tech- new BMW and MINI models are being developed, thus
nology on the one hand and the various electric motors, ensuring, among other things, that future model variants
energy storage and energy management systems for equipped with hybrid drive technology will be just as
electric and plug-in hybrid vehicles developed for BMW suitable for everyday use as their standard counterparts.
eDrive on the other. In the long term, the BMW Group
is also promoting the development of hydrogen-powered The BMW Group took a further step forward in the field
fuel cell technology as a source of energy. of powertrain electrification with its presentation in
2014 of the newly developed range of hybrid drive sys-
The new Efficient Dynamics family of engines, com- tems intended for high-performance electric drives
prising 3-, 4- and 6-cylinder power units, reflects the based on Power eDrive technology. In future-generation
output of a rigorous and consistently applied develop- plug-in hybrid vehicles, around two-thirds of the drive
ment process. Higher aluminium content plus the use system’s output should come from the Power eDrive
of magnesium (which is even lighter) has enabled the electric system and around one-third from the TwinPower
BMW Group to significantly reduce the average weight turbo technology combustion engine. The BMW Group
of its latest range of engines. The first of this new gen- is pressing ahead with the development of battery-
eration of engines is a 1.5-litre, 3-cylinder petrol engine, powered drive systems (as in the BMW i3) and plug-in
which has found its first home in the BMW i8. The BMW hybrids, as well as in other areas such as fuel-cell electric
Group also presented the first 4-cylinder versions of technology and high-voltage electrified systems (Power
eDrive). With its wide range of drive systems, the BMW
*
Prior year figures have been adjusted in accordance with IAS 8, see note 9. Group can and will continue to be able to react flexibly
to the needs of customers and new regulations stipulated the utmost safety at the vehicle’s dynamic limit, thanks
by legislators. to perfected control technology. On a closed-off race-
track, the BMW test vehicle additionally underlined the
Intelligently designed lightweight construction efficiency of a new generation of control systems, which
Lightweight construction is an essential component of can actively intervene in key driving decisions and
the BMW Group’s Efficient Dynamics strategy and at the same time coordinate the electrically controlled
firmly embedded in its basic understanding of modern steering with the brake and accelerator. The system
manufacturing. The consistent use of lightweight mate- therefore goes one decisive step further than any of its
rials in vehicle design is particularly important with predecessors. With BMW ActiveAssist, the BMW Group
electrically powered cars, as not only the battery capacity, is playing a pioneering role in implementing safety-re-
but also the total weight of the vehicle restrict their lated, highly automated systems. Back in October 2009,
range. In order to compensate for the added weight of in conjunction with the predecessor research project,
the electrical components, the BMW Group has devel- BMW Track Trainer, the BMW Group drove a highly au-
oped its LifeDrive concept for BMW i series vehicles, tomated vehicle through the racing line of the “Nord-
which is firmly committed to the use of lightweight de- schleife” at the Nürburgring racetrack, one of the most
sign. In this context, the BMW Group has, for the first demanding circuits in the world. The BMW emergency
time, achieved an innovative combination comprising stop assistant research project has delivered further
an aluminium chassis and a CFRP passenger compart- valuable findings. If the driver fails to react, for example
ment. Specifically deployed, the material used helps re- due to a medical emergency such as a heart attack,
duce total vehicle weight, optimises its point of gravity this feature can switch to the highly automated mode,
and increases the stability of the car’s body. The BMW steer the vehicle safely to the roadside and automatically
Group is currently working on further possible applica- send an emergency call. Back in 2011, the first BMW
tions, such as hybrid wheel rims comprising a mixture test vehicle was already driven on a multi-lane motor-
of aluminium and CFRP. In the case of the BMW M3 way u sing the highly automated mode. Meanwhile, with
and M4 models, the high rigidity and low weight of CFRP some 20,000 kilometres of testing behind them, the
allows the cardan shaft to be manufactured as a single development engineers have gathered valuable insights
piece, without a centre bearing. In addition to achieving into the behaviour and handling strategies of their highly
a 40 % weight-saving compared to the previous model, automated vehicles.
a further benefit is that the rotating mass is reduced,
thus resulting in a further improvement in response be- Research project “Virtual marketplace of the future”
haviour. After more than ten years of intensive research Location Based Services enable users to receive infor-
work and the continual optimisation of the processes, mation on places of interest, services and events in the
materials, systems and tools involved, the BMW Group surrounding area – anytime and anywhere. Even while
is currently the only automotive manufacturer with driving, location-based services and other information
the required know-how to utilise CFRP on a large-scale can be a useful supplement, either en route or at your
production basis. destination. For that reason, BMW ConnectedDrive al-
ready offers users a whole range of location-based infor-
Highly automated driving at the limit mation. In future, the vehicle will be able to present the
Precise, reliable control of a vehicle when driven at its customer with information and items of interest along
dynamic limit is a key aspect of highly automated driving. the route, tailored to suit the situation and the user’s
Only a system that can safely master all dynamic situa- individual preferences. The premiere of the latest gen-
tions, including those encountered when a vehicle is eration of the optional navigation system “Professional”
driven at its technical limit, will be able to instil trust and in the BMW 2 Series Convertible achieved an even
provide sustained and secure relief for the driver in tiring higher level of convenience and reliability in terms of
situations. route guidance. The system, which was first presented
in 2014, updates its navigation data on a regular basis,
The BMW Group has built an innovative, highly auto- several times per year, assuming a new version of map
mated research prototype, which in 2014 demonstrated data is available. The user is required to pay neither
40
PURCHASING AND SUPPLIER NETWORK
l icensing fees nor transmission costs. Via the SIM card The primary focus of the BMW Group’s purchasing and
built into the car, the new map data are sent to the logistics activities is to achieve an optimal balance of
vehicle via the mobile network (LTE), without having quality, innovation, flexible supply structures and com-
to take the longer route via an external data carrier and petitive cost. In this context, we therefore go to great
18 General Information on the BMW Group manual installation. lengths to design the supply chain with our business
partners, thus ensuring that we can react rapidly and
Environment Outstanding technology and design flexibly at all times to fluctuations in order volumes, even
In the most recent competition for the prestigious “In- within a volatile environment.
Performance Indicators ternational Engine of the Year Award”, the BMW Group
29 Automotive Segment was awarded prizes in two different categories. For the Numerous model start-ups
35 Motorcycles Segment fourth time now, the 3.0-litre in-line 6-cylinder petrol 2014 saw the start-up of 13 new BMW and MINI brand
38 Research and Development engine featuring BMW TwinPower turbo technology was models. Most of the BMW start-ups were concentrated
40 Purchasing among the main prizewinners. The engine powers on Europe and the NAFTA region. The production start
44 Workforce numerous current BMW models. The 1.6-litre 4-cylinder of the new X4 at the Spartanburg plant resulted in a
45 Sustainability
turbo engine, which is fitted in models such as the MINI broader supplier base within the NAFTA region. Close
Position and Net Assets Cooper S Countryman and the MINI Cooper S Paceman, collaboration with external business partners and the
of BMW AG
was winner in its class for the eighth consecutive time. BMW Group’s own in-house component production
64 Events after the End of the team resulted in the introduction of numerous innova-
The BMW Group won as many as eight prizes at last tions, many of them relating to the BMW i8.
Reporting Period
Opportunities year’s “Red Dot Award for Product Design”. The “Red
Management System Relevant for the Dot” went to seven BMW models. Apart from the Increasing importance of NAFTA region
Consolidated Financial Reporting P rocess BMW i3, which took the “Red Dot: Best of the Best” During the year under report, the construction of a new
and Explanatory Comments award and thus the highest accolade for trendsetting plant in San Luis Potosí (Mexico) with a planned annual
design, the BMW i8, the 2 Series Coupé, the 3 Series manufacturing capacity of 150,000 units was announced.
Gran Turismo, the 4 Series Coupé and Convertible and This move is in line with the strategy of ensuring glob-
the BMW R nineT all received prizes. Furthermore, ally balanced growth. For the BMW Group, it will also
the new MINI received an “Honourable Mention”. With entail a further increase in NAFTA-based purchases in
the “iF product design award”, the BMW i8 was pre- the coming years, whilst at the same time contributing
sented with a prize by Industrie Forum Design e. V. for to currency hedging. In view of these developments,
its innovative design. The greatest appreciation, how- the BMW Group’s decentralised organisational struc-
ever, was accorded to the BMW i3, which won the “iF tures in the NAFTA region have been strengthened and
product design award Gold”. Further awards went to newly aligned.
the X5, the 2 Series Coupé, the 4 Series Coupé, the 3 Se-
ries Gran Turismo and the BMW R nineT in the cate-
gory “Product, transportation design / special vehicles”. Regional mix of BMW Group purchase volumes 2014
in %, basis: production material
Africa
Asia / Australia
NAFTA
Germany
Rest of
Western Europe
Eastern Europe

Germany 47.2 NAFTA 14.5
Eastern Europe 17.2 Asia / Australia 3.7
Rest of Western Europe 15.9 Africa 1.5

SALES AND MARKETING
High level of investment safeguards productivity The worldwide sales network currently consists of some
and technology lead 3,250 BMW, 1,550 MINI and 130 Rolls-Royce dealer-
The Purchasing and Supplier Network is also responsible ships. In China alone, more than 40 BMW and 30 MINI
for component production throughout the BMW Group. dealerships were opened in 2014. The BMW i dealership
The importance of the Landshut plant as a competence and agency network currently covers some 650 loca-
centre for lightweight construction was underlined by tions.
the expansion of CFRP production facilities at the site.
The Landshut plant also serves as a centre for electro- BMW extends its model range
mobility-related components, including, for instance, For the BMW Group, the year 2014 was dominated by
production of the electric motors and engine transmission the introduction of a number of new models and model
units for the BMW i3 and i8. Important chassis and updates. The new BMW 4 Series Convertible and the
drive components for the BMW i models are produced model revision of the BMW X1 were both launched in
at the Dingolfing plant. March. The BMW 4 Series Convertible excels with its
enhanced sports performance and quintessential ele-
gance. Since March 2014 customers have also been able
to enjoy the impressive driving dynamics of the new
BMW 2 Series Coupé. The BMW M3 Sedan and the
BMW M4 Coupé were first seen in the showrooms in
June. Our M models are a unique blend of genuine
sporting performance and perfect suitability for every-
day use. The BMW 4 Series Gran Coupé, the third body
variant of this series, came onto the market the same
month. It combines the attractive design of a two-door
coupé with the functionality of four doors and space
to spare. A particularly important event for the BMW
Group took place in June, namely the market launch of
the BMW i8 plug-in hybrid sports car, which offers the
dynamics of a high-performance sports model with low
fuel consumption and emissions levels.
July saw the sales launch of the new BMW X4, a vehicle
that possesses the sporty elegance of a classic coupé,
superbly crossed with the typical characteristics of the
BMW X series. The model update of the BMW X3 fol-
lowed the same month. The new BMW 2 Series Active
Tourer and the BMW M4 Convertible have been on
display in dealership showrooms since September. The
new BMW 2 Series Active Tourer opens up completely
new customer groups, meeting their needs for versa-
tility, functionality and ample spaciousness in the com-
pact segment. The BMW M4 Convertible’s design lan-
guage conveys an unmistakeably stylish and at the same
time muscular profile. The second-generation BMW X6,
which boasts a luxurious interior design and new fea-
tures with a wider range of standard equipment, has been
in the showrooms since December 2014.
New MINI also available in five-door version

The third generation of the three-door MINI entered the
showrooms in March. The new MINI has been received
enthusiastically, with its new possibilities for connectivity
42
and efficient 3- and 4-cylinder TwinPower turbo engines. worldwide. In the meantime, 95 % of all new vehicles in
For the first time in its 55-year history, a five-door ver- the BMW fleet are equipped with an integrated SIM
sion of the MINI has been available since October. The card.
two MINI models have received the highest acclaim
18 General Information on the BMW Group both in the media and from customers. The model up- In addition to its intelligent emergency call feature,
dates of the MINI Countryman and MINI Paceman were which already offers a broader range of functions than
Environment both launched in July. In December, the BMW Group the E-call required by EU legislation as from 2016, the
announced the new John Cooper Works MINI, which will customer can benefit from a large number of innova-
Performance Indicators be available on markets worldwide from spring 2015. tive services. These include the Concierge Call, which
29 Automotive Segment is available around the clock and – if required – looks
35 Motorcycles Segment Start-up of Rolls-Royce Ghost Series II up addresses and feeds them directly into the naviga-
38 Research and Development The Rolls-Royce Ghost Series II has been in the show- tion system or makes reservations directly. In addi-
40 Purchasing rooms since the autumn with a moderately revised tion, the real-time traffic information (RTTI) or the re-
44 Workforce design and continues to combine smooth, understated mote functions, for example, offer useful support for
45 Sustainability
performance with contemporary luxury. the driver.
Position and Net Assets
of BMW AG
In 2014, Rolls-Royce Motor Cars added ten dealerships In addition, further distribution channels have been
64 Events after the End of the to its sales network, an important step in its aspiration established for mobility services. During the year under
to strengthen its position in the ultra-luxury segment. report, the ConnectedDrive Store opened not only in
Reporting Period
Opportunities the pilot markets of Belgium and Luxembourg, but also
Management System Relevant for the New approach to communications with #BMWstories in Germany. For the first time in the premium segment,
Consolidated Financial Reporting P rocess BMW is breaking new ground in communications services can therefore be ordered quickly and easily via
and Explanatory Comments with #BMWstories. The online platform www.bmw. a PC or even directly from the vehicle, and used straight
com / BMWstories offers a broad spectrum of commu- away. The ConnectedDrive Store therefore grants ac-
nication channels. These include films and photo gal- cess not only to new vehicles but also to used vehicles
leries depicting the special features of BMW models. equipped with ConnectedDrive.
Since #BMWstories started in May 2014, the online
platform has received more than 3.5 million hits. Over BMW i sales model
200 million interactions have already taken place in To coincide with the market launch of the BMW i3 in
social media. The published videos have been viewed Europe and Japan, a direct sales model was successfully
over 36 million times. introduced in these markets. Over 200 selected BMW i
partners offer BMW i brand vehicles. In addition, the
Successful launch of BMW i 360°ELECTRIC BMW i models are available in selected direct sales mar-
With BMW i 360° ELECTRIC, BMW currently offers a kets via new distribution channels – including via the
comprehensive package of products and services for Customer Interaction Centre (CIC), which has been suc-
purely battery-powered and plug-in hybrid vehicles in cessfully introduced in nine markets. In four markets
38 countries worldwide. The package is based on four to start with, the Mobile Sales Advisor (MSA) has also
features: comfortable, rapid, emissions-free charging at become a fixed component of the BMW i sales model.
home; simple comprehensive access to public charging The integrated BMW i online sales platform enables cus-
stations; flexible mobility for long-distance journeys tomers to order their BMW i3 via the Internet, too. The
and an Assistance Service for maintenance and repairs. new sales channels provide customer-friendly access to
BMW offers two types of product for charging at home: the BMW i range of products and services. In the show-
in addition to the Wallbox Pure for simple, safe charging, rooms, the Product Genius in operation at all BMW i
the Wallbox Pro has been available since 2014 for more partners also contributes to comprehensive product
rapid availability. advice.
Development of connected mobility Premium services for individual mobility

The BMW Group further extended its connected mobil- Beyond its innovative electric and hybrid cars, BMW i
ity services in 2014. In total, BMW ConnectedDrive ser- also stands for sustainable mobility concepts. The aim
vices were introduced in a further eleven markets, as a of the mobility services is to promote urban mobility,
result of which they are now available in 36 countries irrespective of the means of transport used.
DriveNow, the car-sharing service offered by BMW i, Future Retail comprises:

MINI and Sixt, enables users to rent BMW and MINI – new and additional opportunities to make contact
vehicles according to their needs. Via an app, the web- with our brands (for example, the BMW and MINI
site or directly on the road, it is a simple matter for users Driving Center in South Korea and BMW Brandstore
to find, book and park the cars again in another part Brussels),
of the city. The DriveNow service is currently available – comprehensively improved dealerships, which offer
in Munich, Berlin, Düsseldorf, Hamburg, Cologne, San a premium experience, and
Francisco, Vienna and, since December 2014, in London, – targeted support for dealerships, enabling customer
too. The fleet currently consists of about 2,800 cars. At needs to be met even more effectively.
the end of 2014, over 390,000 customers had benefited
from the premium car-sharing service. Under the brand The use of some 1,900 Product Geniuses worldwide in
name AlphaCity, we also offer a car-sharing scheme more than 1,000 dealerships has proved to be particu-
for businesses. Up to November 2014, 10,000 registered larly successful.
employees had used the AlphaCity service.
ParkNow is an app- and Web-based service, which helps

resolve parking problems for users. On the one hand,
parking spaces are available to customers in partner car
parks which can be booked online. On the other hand,
the service makes it easier to find roadside parking spots.
ChargeNow is the BMW i mobility service that sim
plifies finding and using public charging stations run by
various suppliers belonging to an international net-
work. In 2014, a large proportion of BMW i customers
opted for this service. ChargeNow currently has over
24,000 charging points at its disposal in 19 markets.
BMW i Ventures was founded back in 2011 to ensure

optimum conditions for the use and promotion of inno-
vative mobility services. Based in New York, BMW i
Ventures facilitates access to new technologies and opens
up new customer groups, thereby reinforcing the strate-
gic approach adopted by BMW i. Life360, MyCityWay,
JustPark, ChargePoint and ChargeMaster are examples
of some of BMW i Ventures’ strategic investments.
Customer services remain on track in 2014

In 2014, sales of BMW and MINI spare parts, accessories
and services were well up on the previous year’s level,
with the major markets in the USA, Germany and China
making a decisive contribution to this performance.
Growth was also registered in many other markets, such
as Russia, Korea and South Africa. The dynamic growth
in business goes hand in hand with investments in the
future logistics network and with many other measures
aimed at boosting customer satisfaction.
New premium experience in showrooms

By 2017, the Future Retail programme will be imple-
mented worldwide with a view to enhancing the pre-
mium experience of our brands and products.
44
WORKFORCE
Workforce further increased BMW Group apprentices at 31 December

The BMW Group’s worldwide workforce had grown to a
total of 116,324 employees at 31 December 2014 (2013: 4,500

110,351 employees; + 5.4 %). The increase was attribut- 3,750
18 General Information on the BMW Group able mainly to the expansion of our international produc- 3,000
tion network and the increased scale of development 2,250
Environment activities to generate innovations and new technologies 1,500
for the future. Engineers and skilled staff were recruited
26 Financial and Non-financial 750
Performance Indicators specifically for this purpose.
29 Automotive Segment 10 11 12 13 14
35 Motorcycles Segment More apprentices worldwide
38 Research and Development Some 1,500 young people, including 1,200 in Germany, 3,798 3,899 4,266 4,445 4,595
40 Purchasing began their vocational training with the BMW Group in
44 Workforce 2014, representing a significant expansion in worldwide
45 Sustainability
training activities (2013: 1,363 apprentices). At the end
Position and Net Assets of the reporting period, 4,595 young people worldwide Trendence “Graduate Barometer Germany”, with first
of BMW AG
were in vocational training and training programmes for place in the Business category, second place in Engineer-
64 Events after the End of the young talent with the BMW Group. ing and third place in IT students, the BMW Group
achieved its best results since 2007.
Reporting Period
Opportunities Steep rise in investment in employee training
Management System Relevant for the Expenditure on basic and further training rose signifi- Diversity ensures competitiveness
Consolidated Financial Reporting P rocess cantly during the period under review to €335 million Diversity in our workforce makes a major contribution
and Explanatory Comments (2013: €288 million; + 16.3 %), with the main focus of to improving our competitiveness, by equipping us to
training on electromobility, modern production tech- respond even better to our customers’ specific needs
niques and healthcare programmes. and requirements worldwide. We focus on three criteria
in this respect: gender, cultural background and age /
Further progress made as attractive employer experience.
In 2014, the BMW Group further strengthened its posi-
tion as one of the most attractive employers in the world. A number of steps were taken to promote diversity in
In “The World’s Most Attractive Employers”, published the BMW Group during 2014. The proportion of women
by the agency “Universum”, the BMW Group was once in the workforce as a whole, in management positions
again ranked as the best German employer across all and in training programmes for young talent, again rose
sectors and the most attractive automotive company in during the year under report. The proportion of women
the world. It is now classified in the top 3 in the engineer- in the BMW Group’s workforce, which stood at 17.8 %
ing category worldwide. (BMW AG: 14.8 %) currently exceeds the target range of
15 to 17 %. The proportion of women in BMW Group
In Trendence’s “European Graduate Barometer”, too, the management positions rose to 14.2 % (BMW AG: 11.4 %).
BMW Group’s ranking improved. In Trendence’s “Young In the young talent groups, too, the proportion of women
Professional Barometer”, the BMW Group occupied first rose in 2014. Female representation in trainee pro-
place for the third year in a row and even managed to grammes is already above 50 %, and over 27 % of partici-
increase the gap to its competitors. Furthermore, in the pants in student training programmes are women.
BMW Group employees
31.12. 2014 31.12. 2013 Change

in %
Automotive 106,064 100,682 5.3

Motorcycles 2,894 2,726 6.2
Financial Services 7,245 6,823 6.2
Other 121 120 0.8
BMW Group 116,324 110,351 5.4
SUSTAINABILITY
Proportion of non-tariff female employees at Sustainable management

BMW AG / BMW Group Sustainability for the BMW Group means making a
in % lasting positive contribution to economic success, thus
14 creating added value for the business. Manufacturing
13 with efficient and resource-friendly production pro-
12 cesses and offering customers state-of-the-art solutions
11 for sustainable individual mobility gives the BMW
10 Group a competitive advantage. Our employees play a
9 vital role in this context with their personal commit-
ment and ideas, a fact borne out, for example, by the
10 11 12 13 14 € 31 million saved in 2014 alone in conjunction with
the ideas management system in place throughout the
BMW AG 8.8 9.1 10.0 10.9 11.4 BMW Group. Our commitment to sustainable manage-
BMW Group 11.1 11.8 12.7 * 13.8 14.2 ment and our aspiration for social responsibility along
the entire value chain are firmly embedded within the
BMW Group.
*
Figure adjusted.
As well as requiring social and ecological aspects to be

At the same time, the workforce in Germany is also taken into account in internal decision-making pro-
becoming more international. In Munich alone, em- cesses, the BMW Group’s sustainability management
ployees from 98 different countries work t ogether system involves the systematic analysis of external fac-
successfully. We also attach importance to a balanced tors and a continual dialogue with our stakeholders.
age structure in the workforce, with a view to promot-
ing exchanges between the generations and mitigating Materiality process
the loss of know-how when older employees retire. Global megatrends such as urbanisation or climate
change have an impact on both regulatory conditions
and customer requirements, causing new fields of
Employee attrition rate at BMW AG* business to arise. In order to recognise any such
as a percentage of workforce changes in good time, we regularly perform a review
7.0
using our materiality process. In this context, we ana-
6.0
lyse the importance of challenges on society, both from
5.0
the point of view of different stakeholder groups and
4.0
from an internal BMW Group perspective. The results
3.0
of the materiality analysis – shown in the materiality
2.0
matrix – form the basis for our regular verification of
1.0
the direction our sustainability strategy is taking.

10 11 12 13 14
Sustainability ratings

In 2014 the BMW Group was able to maintain its posi-
2.74 2.16 3.87 3.47 1.41
tion as most sustainable premium manufacturer in the

*
Number of employees on unlimited employment contracts leaving the Company.
automotive industry and again secured excellent plac-
ings in widely regarded ratings. In the Dow Jones Sus-
tainability Indices (DJSI), for instance, the BMW Group
took first place in the Automobiles sector. The BMW
Group is therefore the only enterprise in this sector to
have been listed in the index without interruption since
its inception. In the Global 500 rating of the Carbon
Disclosure Project (CDP), we again achieved 100 out of
a possible 100 points for transparent reporting and the
best mark for climate protection measures, thus retaining
our leading position again in 2014. Based on this result,
the BMW Group is listed with the highest performance
score “A” in the global Climate Performance Leadership
46
Materiality matrix
Importance for stakeholders Efficient use
of resources  CO2emissions
Product
safety and recycling and climate change
18 COMBINED M ANAGEMENT REPORT  management
Environmental and social standards in the supply chain    Alternative
drivetrain
Anti-corruption / compliance 
 Energy supply technologies
23 General and Sector-specific Future mobility / mobility services 
Environment
 Water  Human rights / Occupational health and safety
Further education and training 
Performance Indicators Corporate Citizenship   Demographic change
 Biodiversity
35 Motorcycles Segment  Diversity

38 Research and Development  Work-life balance
40 Purchasing
41 Sales and Marketing  Donations / sponsoring
44 Workforce
45 Sustainability
49 Results of Operations, Financial  Corporate volunteering

of BMW AG
Reporting Period
Opportunities Importance for BMW Group
Consolidated Financial Reporting P rocess Index (CPLI) – as the only automotive producer for five The BMW Group again reduced the energy consump-
and Explanatory Comments consecutive years. The BMW Group was also included in tion per vehicle produced by 4.7 % to 2.25 MWh during
the British FTSE4Good Index again in 2014. the period under report. One of the measures that con-
tributed towards the efficiency improvement was the
Clean production utilisation of intelligent energy data management. It is a
The BMW Group improves resource efficiency by inte- component of the BMW Group’s “Industrie 4.0” pro-
grating environmental management in all of its produc- duction concept and based on intelligent electricity me-
tion processes. Since 2006 we have reduced both the ters that continually measure the energy consumption
volume of resources utilised and the emissions per vehi- levels of production facilities and robots and compare
cle produced by an average of 45.0 %.* them with a centralised corporate network for the pur-
pose of detecting and avoiding, at the earliest possible
The individual figures are as follows: stage, any deviations that lead to excessive electricity
consumption.

The utilisation of highly efficient, ecologically sustain

Energy consumption – 34.2 % able combined heat and power plants (CHPs) and the
Water consumption – 33.1 % use of electricity generated from renewable sources at
Process wastewater – 42.7 % our production sites, as well as improved energy effi-
Non-recyclable waste – 74.0 % ciency measures, enabled us to reduce CO2 emissions
Solvent emissions – 48.6 % per vehicle produced by a further 2.9 % year-on-year to
CO2 emissions – 37.1 % 0.66 tonnes during the period under report.
At 2.18 m³ per vehicle produced, water consumption

In 2014 we reduced both the volume of resources utilised was maintained at a stable low level. At 0.47 m³ the same
and the emissions per vehicle produced by an average applies to the volume of process wastewater generated
of 6.7 % compared with the previous year, giving rise to per vehicle produced.
savings of € 15.8 million.
The volume of non-recyclable production waste was
further reduced to 4.93 kg per vehicle produced in 2014,
an improvement of 14.0 %. A number of measures con-
*
Including joint venture BMW Brilliance Automotive Ltd., Shenyang, excluding
tributed towards this development, one of which was
contract production. an additional improvement in the treatment of washing
Energy consumed* per vehicle produced Water consumption* per vehicle produced
in MWh / vehicle in m3 / vehicle
3.00 2.80
2.80 2.60
2.60 2.40
2.40 2.20
2.20 2.00
2.00 1.80

10 11 12 13 14 10 11 12 13 14

2.72 2.43 2.41 2.36 2.25 2.40 2.25 2.22 2.18 2.18

* Excluding contract production, adjusted for CHP losses. * Excluding contract production.
water used in the production of passenger car brake The amount of energy needed for transportation world-
discs at the Berlin plant. wide has risen considerably in recent years. In order to
keep CO2 emissions to an absolute minimum, we adhere
Solvent emissions were sharply curtailed by 18.9 % to the principle “production follows the market”. More-
to 1.29 kg per vehicle produced during 2014, which is over, we are continually increasing the percentage of
mainly due to the fact that in the Chinese plant in low-carbon modes of transport we use. In total, 63.3 %
Dadong* the retrofitting of the paint shop with an ex- of all new vehicles left our plants by rail during the twelve-
haust air cleaning system was reflected in full-year month period under report (2013: 60.7 %).
statistics for the first time.
*
Joint venture BMW Brilliance Automotive Ltd., Shenyang. Fleet CO2 emissions again reduced
For many years now, the use of our Efficient Dynamics
Sustainability along the entire value chain technologies in series production has enabled us to
Sustainability criteria also play a major role in the selec- continually reduce the CO2 emissions generated by our
tion and assessment of our suppliers as well as in the vehicles. Again in 2014, further progress was made in
field of transport logistics. The active management of the electrification of our fleet with the introduction of
sustainability risks along the supplier chain reduces com- the BMW i8 plug-in hybrid sports car and the launching
pliance and image risks. With this in mind, the BMW of the BMW i3 in additional key markets. These meas-
Group has integrated a comprehensive system of sustain- ures form the basis for complying with legally stipulated
ability management in its purchasing processes. CO2 and fuel consumption limits going into the future.
CO2 emissions* per vehicle produced Process wastewater* per vehicle produced
in t / vehicle in m3 / vehicle
0.90 0.70
0.85 0.60
0.80 0.50
0.75 0.40
0.70 0.30
0.65 0.20

10 11 12 13 14 10 11 12 13 14

0.89 0.75 0.72 0.68 0.66 0.60 0.57 0.51 0.47 0.47

* Excluding contract production, adjusted for CHP losses. * Excluding contract production.
48
Waste for disposal* per vehicle produced Volatile organic compounds (VOC)*
in kg / vehicle per vehicle produced
15.0 in kg / vehicle
12.5 2.00
18 General Information on the BMW Group 10.0 1.75
23 General and Sector-specific 7.5 1.50
Environment 5.0 1.25
26 Financial and Non-financial 2.5 1.00
29 Automotive Segment 10 11 12 13 14 10 11 12 13 14
35 Motorcycles Segment

38 Research and Development 10.49 8.49 6.47 5.73 4.93 1.66 1.75 1.78 1.59 1.29
40 Purchasing

41 Sales and Marketing * Excluding contract production. * Excluding contract production.
44 Workforce
45 Sustainability
of BMW AG
Between 1995 and 2014, the average CO2 emissions of
64 Events after the End of the the vehicles we sold in Europe fell by 38 %. In 2014,
the BMW Group’s fleet of new vehicles sold in Europe
Reporting Period
Opportunities (EU-28) consumed an average of 4.9 litres of diesel per
Management System Relevant for the 100 km and 6.0 litres of petrol respectively. CO2 emis-
Consolidated Financial Reporting P rocess sions averaged 130 grams per km. In Germany, too,
and Explanatory Comments we led the field among premium-segment manufac
turers with average CO2 emissions of 136 grams per
km. In 2014 the BMW Group’s fleet included as many
as 53 models emitting less than 120 grams of CO2 per
km. Our efficient technologies have given us a com-
petitive edge, particularly in markets where a CO2-
based vehicle tax is levied.
Further information on the subject of sustainability in

the BMW Group is available in our online sustainability
report at: www.bmwgroup.com / sustainability. The
Sustainable Value Report 2014 was prepared in accord-
ance with the Global Reporting Initiative (GRI G3.1)
guideline and, at Level A+ (GRI-tested), fulfils the
highest application level of the GRI guideline. It will be
published in conjunction with the Annual Report 2014.

Results of Operations, Financial Position and Net Assets
Earnings performance1 of a number of currencies, including the Japanese yen,

The BMW Group is again able to report on an exceed- Russian rouble and South African rand. Adjusted for
ingly successful financial year. Business performance exchange rate factors, revenues increased by 6.8 %.
remained on track, with sales volume, revenues and
earnings all coming in at record levels. The number of Revenues comprise mainly the sale of vehicles and related
BMW, MINI and Rolls-Royce brand vehicles sold rose products (2014: € 60,280 million; 2013: € 56,812 million),
by 7.9 % to 2,117,9652 units. The BMW brand was again lease instalments (2014: € 7,748 million; 2013: € 7,296 mil-
able to maintain its pole position at the head of the lion), the sale of vehicles previously leased to customers
premium segment. (2014: € 6,716 million; 2013: € 6,412 million) and interest
income on loan financing (2014: € 2,881 million; 2013:
The BMW Group recorded a net profit of € 5,817 mil- € 2,868 million).
lion (2013: € 5,329 million) for the financial year ended
31 December 2014. The post-tax return on sales was All segments contributed to the increase in revenues.
7.2 % (2013: 7.0 %). Earnings per share of common and External revenues from the sale of BMW, MINI and
preferred stock were € 8.83 and € 8.85 respectively (2013: Rolls-Royce brand cars grew by 6.0 % on the back of
€ 8.08 and € 8.10 respectively). higher sales volumes. Adjusted for exchange rate fac-
tors, revenues went up by 7.3 %. Compared to the
Revenues of the BMW Group increased year-on-year by previous year, the BMW Group recorded a significant
5.7 % to a new record figure of € 80,401 million (2013: rise (11.8 %) in external revenues from its Motorcycles
€ 76,059 million), driven primarily by the continued up- business. External revenues generated with Financial
ward trend in sales volume. The scale of the increase Services business was 4.4 % up on the previous year.
was held down partly by higher inter-segment revenue Adjusted for exchange rate factors, revenues of the Motor-
eliminations due to the growth of new lease business cycles and Financial Services segments increased by
and partly by the change in the average exchange rates 14.1 % and 4.5 % respectively.
Group Income Statement

in € million
2014 20131
Revenues 80,401 76,059

Cost of sales – 63,396 – 60,791
Gross profit 17,005 15,268
Selling and administrative expenses – 7,892 – 7,257

Other operating income 877 842
Other operating expenses – 872 – 875
Profit before financial result 9,118 7,978
Result from equity accounted investments 655 407

Interest and similar income 200 183
Interest and similar expenses – 519 – 469
Other financial result – 747 – 206
Financial result – 411 – 85
Profit before tax 8,707 7,893
Income taxes – 2,890 – 2,564

Net profit 5,817 5,329
1
P
2
henyang (2013: 198,542 units, 2014: 275,891 units).
50
As in the previous year, Group revenues are spread a mortisation). The research and development expend-
across all regions, with the Europe region (including iture ratio was therefore 5.7 % (2013: 6.3 %). The pro-
Germany) accounting for 46.8 % (2013: 45.2 %), the portion of development costs recognised as assets was
Americas region for 20.7 % (2013: 20.7 %) and the Africa, 32.8 % (2013: 36.4 %).
18 General Information on the BMW Group Asia and Oceania region for 32.5 % (2013: 34.1 %) of
18 Business Model
business. Compared to the previous year, selling and administra-
23 Report on Economic Position tive expenses increased by € 635 million to € 7,892 mil-
Revenues in the Africa, Asia and Oceania region to- lion. Overall, selling and administrative expenses were
Environment
26 Overall Assessment by Management talled € 26,147 million (2013: € 25,916 million), roughly equivalent to 9.8 % (2013: 9.5 %) of revenues. Adminis-
Performance Indicators at the previous year’s level (+ 0.9 %). In China, the trative expenses increased due to a number of factors,
29 Review of Operations higher proportion of sales generated by the joint ven- including the higher workforce size and higher expenses
Position and Net Assets ture, BMW Brilliance Ltd., Shenyang, resulted in a slight for centralised IT activities and new IT projects. Depre-
61 Comments on Financial Statements decrease in revenues reported for this market. By con- ciation and amortisation on property, plant and equip-
of BMW AG
64 Events after the End of the trast, revenues generated in South Korea were up sig- ment and intangible assets recorded in cost of sales and
Reporting Period
nificantly on the back of higher sales volume figures. in selling and administrative expenses amounted to
Opportunities External revenue in Germany grew by 10.1 %. In the € 4,170 million (2013: € 3,741 million).
65 Outlook
Rest of Europe region and in the Americas region, ex-
82 Internal Control System and Risk ternal revenues increased by 9.2 % and 5.3 % respec- Other operating income and expenses improved from
tively. a net expense of € 33 million to a net income of € 5 mil-
rocess
83 Disclosures Relevant for Takeovers lion. The improvement was mainly attributable to gains
87 BMW Stock and Capital Markets Group cost of sales were 4.3 % higher than in the pre on the sale of assets, including those arising on the
vious year and comprise mainly manufacturing costs deconsolidation of Noord Lease B.V., Groningen, and
(2014: € 38,253 million; 2013: € 36,578 million), cost of the sale of marketable securities.
sales directly attributable to financial services (2014:
€ 14,716 million; 2013: € 14,044 million) and research The profit before financial result ( EBIT ) came in at
and development expenses (2014: € 4,135 million; 2013: € 9,118 million (2013: € 7,978 million).
€ 4,118 million). Changes in the average exchange rates
of some currencies as well as inter-segment elimina- The financial result for the twelve-month period was a
tions worked in the opposite direction. net negative amount of € 411 million, a deterioration
of € 326 million compared to the previous year. The net
Gross profit improved by 11.4 % to € 17,005 million, re- expense for other financial result increased by € 541 mil-
sulting in a gross profit margin of 21.2 % (2013: 20.1 %). lion to € 747 million, mostly reflecting the negative
impact of currency and commodity derivatives. Impair-
The gross profit margin recorded by the Automotive ment losses recognised on other investments, most
segment was 18.6 % (2013: 18.2 %), while that of the n otably on the investment in SGL Carbon SE, Wiesbaden,
Motorcycles segment was 18.7 % (2013: 16.7 %). In the also contributed to the deterioration in other financial
Financial Services segment, the gross profit margin result. By contrast, the result from equity accounted in-
improved from 13.1 % to 13.7 %. vestments – which includes the Group’s share of the
results of the joint ventures BMW Brilliance Automotive
Compared to the previous year, research and develop- Ltd., Shenyang, DriveNow GmbH & Co. KG, Munich,
ment expenses increased by € 17 million to € 4,135 mil- and DriveNow Verwaltungs GmbH, Munich – improved
lion. As a percentage of revenues, the research and by € 248 million.
development ratio fell by 0.3 percentage points to 5.1 %.
Research and development expenses include amorti Profit before tax increased to € 8,707 million (2013:
sation of capitalised development costs amounting to € 7,893 million). The pre-tax return on sales was 10.8 %
€ 1,068 million (2013: € 1,069 million). Total research (2013: 10.4 %).
and development expenditure amounted to € 4,566 mil-
lion (2013: € 4,793 million). This figure comprises re- Income tax expense amounted to € 2,890 million (2013:
search costs, non-capitalised development costs and € 2,564 million), resulting in an effective tax rate of
capitalised development costs (excluding scheduled 33.2 % (2013: 32.5 %). The changed regional earnings
Revenues by segment Profit / loss before tax by segment

in € million in € million
2014 2013* 2014 2013*
Automotive 75,173 70,630 Automotive 6,886 6,561

Motorcycles 1,679 1,504 Motorcycles 107 76
Financial Services 20,599 19,874 Financial Services 1,723 1,619
Other Entities 7 6 Other Entities 154 164
Eliminations – 17,057 – 15,955 Eliminations – 163 – 527
Group 80,401 76,059 Group 8,707 7,893
* *
Prior year figures have been adjusted in accordance with IAS 8, see note 9. Prior year figures have been adjusted in accordance with IAS 8, see note 9.
mix as well as intergroup pricing issues contributed to counted investments – which includes the segment’s
the increase in the income tax expense for the year. share of the results of BMW Brilliance Automotive
Ltd., Shenyang, and the two DriveNow entities – im-
Earnings performance by segment proved by € 248 million.
Revenues of the Automotive segment grew by 6.4 % to
€ 75,173 million on the back of higher sales volume. Overall, profit before tax amounted to € 6,886 million
Adjusted for exchange rate factors, segment revenues (2013: € 6,561 million), resulting in an effective tax rate
rose by 7.5 %. The gross profit margin improved year- of 34.3 % (2013: 32.8 %).
on-year from 18.2 % to 18.6 %.
Revenues of the Motorcycles segment climbed by 11.6 %
Compared to the previous year, selling and administra- compared to the previous year (by 14.0 % adjusted for
tive expenses increased by € 531 million to € 6,645 mil- exchange rate factors).
lion. Administrative expenses increased due to a num-
ber of factors, including the higher workforce size and Segment profit before tax improved by € 31 million to
higher expenses for centralised IT activities and new € 107 million.
IT projects. Overall, selling and administrative expenses
were equivalent to 8.8 % (2013: 8.7 %) of revenues. Financial Services segment revenues grew by 3.6 % to
€ 20,599 million (by 3.8 % adjusted for exchange rate
The net expense from other operating income and ex- factors). The segment’s performance reflects the growth
penses improved by € 26 million (2013: net expense of in the contract portfolio. The gross profit margin im-
€ 89 million), mainly reflecting gains on the sale of mar- proved year-on-year to 13.7 % (2013: 13.1 %). Selling and
ketable securities. administrative expenses were € 82 million higher at
€ 1,035 million. The net negative amount from other oper-
The profit before financial result (EBIT) amounted to ating income and expenses deteriorated by € 17 million.
€ 7,244 million (2013: € 6,649 million), giving an EBIT Overall the Financial Services segment reports profit
margin of 9.6 % (2013: 9.4 %). before tax of € 1,723 million, 6.4 % up on the previous
year (2013: € 1,619 million).
The financial result of the Automotive segment was a
net negative amount of € 358 million, a deterioration Profit before tax in the Other Entities segment, at
of € 270 million compared to the previous year. Other € 154 million, was € 10 million lower than one year
financial result was adversely affected by currency earlier.
and commodity derivatives and fell to a net negative
amount of € 724 million. This figure also includes im- The negative impact on earnings at the level of profit
pairment losses recognised on other investments, before tax reported in the Eliminations column de-
most notably on the investment in SGL Carbon SE, creased from € 527 million in 2013 to € 163 million in
Wiesbaden. By contrast, the result from equity ac- 2014, partly reflecting product mix improvements
52
within the leased products portfolio and partly due to 18.4 % down on the previous year, primarily reflecting a
elimination reversal effects. € 594 million reduction in investments in property, plant
and equipment and intangible assets (2014: € 6,099 mil-
Financial position* lion) and a € 737 million reduction in the net outflow for
18 General Information on the BMW Group The consolidated cash flow statements for the Group investments in marketable securities and term deposits
18 Business Model
and the Automotive and Financial Services segments (2014: net outflow of € 144 million).
23 Report on Economic Position show the sources and applications of cash flows for the
financial years 2014 and 2013, classified into cash flows Further information on investments is provided in the
Environment
26 Overall Assessment by Management from operating, investing and financing activities. section on the net assets position.
Performance Indicators Cash and cash equivalents in the cash flow statements
29 Review of Operations correspond to the amount disclosed in the balance Cash inflow from financing activities totalled € 3,133 mil-
Position and Net Assets sheet. lion (2013: € 2,703 million). Proceeds from the issue of
61 Comments on Financial Statements bonds amounted to € 10,892 million (2013: € 8,982 mil-
of BMW AG
64 Events after the End of the Cash flows from operating activities are determined in- lion), compared with an outflow of € 7,249 million (2013:
Reporting Period
directly, starting with Group and segment net profit. € 7,242 million) for the repayment of bonds. Non-cur-
Opportunities By contrast, cash flows from investing and financing rent other financial liabilities resulted in a cash inflow
65 Outlook
activities are based on actual payments and receipts. of € 5,900 million (2013: € 6,626 million) and a cash
82 Internal Control System and Risk outflow of € 5,697 million (2013: € 4,996 million). The
The cash inflow from operating activities in 2014 de- net cash inflow for current other financial liabilities
rocess
83 Disclosures Relevant for Takeovers creased by € 1,215 million to € 2,912 million. This dete- was € 2,132 million (2013: net cash outflow of € 721 mil-
87 BMW Stock and Capital Markets rioration was mainly due to higher cash outflows for lion). The change in commercial paper gave rise to
taxes (up by € 1,465 million) and included, among other a net cash outflow of € 1,012 million (2013: net cash
items, a tax payment in the USA. inflow of € 1,812 million). The payment of dividends
resulted in a cash outflow of € 1,715 million (2013:
The cash outflow for investing activities amounted to € 1,653 million).
€ 6,116 million (2013: € 7,491 million) and was therefore
The cash outflow from investing activities exceeded
*
Prior year figures have been adjusted in accordance with IAS 8, see note 9. the cash inflow from operating activities in 2014 by
Change in cash and cash equivalents

in € million
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000

Cash and cash Cash inflow Cash outflow Cash inflow Currency trans- Cash and cash
equivalents from operating from investing from financing lation, changes in equivalents
*
31.12. 2013 activities activities activities Group composition 31.12. 2014
7,671 + 2,912 – 6,116 + 3,133 + 88 7,688

*
€ 3,204 million. A similar constellation arose in the The cash flow statement for the Automotive segment
same p eriod last year, when the cash outflow from shows that the cash inflow from operating activities
investing activities had exceeded the cash inflow from exceeded the cash outflow from investing activities by
operating activities by € 3,364. € 3,587 million (2013: € 1,966 million). Adjusted for net
proceeds from marketable securities and term deposits
After adjusting for the effects of exchange-rate fluctua- amounting to € 106 million (2013: net investments of
tions and changes in the composition of the BMW Group € 1,037 million) – mainly in conjunction with securities
with a total positive amount of € 88 million ( 2013 : held for strategic liquidity purposes – the excess amount
n
egative amount of € 42 million), the various cash flows was € 3,481 million (2013: € 3,003 million).
resulted in an increase of cash and cash equivalents of
€ 17 million (2013: decrease of € 703 million). Free cash flow of the Automotive segment can be ana-
lysed as follows:
in € million 2014 2013*
Cash inflow from operating activities 9,423 9,964

Cash outflow from investing activities – 5,836 – 7,998
Net investment in marketable securities and term deposits – 106 1,037
Free cash flow Automotive segment 3,481 3,003
*
Cash outflows from operating activities of the Financial Net financial assets of the Automotive segment com-
Services segment are driven primarily by cash flows prise the following:
relating to leased products and receivables from sales
financing and totalled € 4,715 million (2013: € 5,358 mil-
lion). Investing activities resulted in a cash outflow of
€ 297 million (2013: cash inflow of € 324 million).
in € million 31.12. 2014 31.12. 20131
Cash and cash equivalents 5,752 6,775

Marketable securities and investment funds 3,366 2,758
Intragroup net financial receivables 8,583 4,411
Financial assets 17,701 13,944
Less: external financial liabilities2 – 3,478 – 1,859

Net financial assets 14,223 12,085
1
P
2
Excluding derivative financial instruments.
Refinancing
Operating cash flow provides a stable financial basis for is used to refinance worldwide operations. Almost all of
the BMW Group. A broadly based range of instruments the funds raised are used to finance the BMW Group’s
transacted on international money and capital markets Financial Services business.
54
The overall objective of Group financing is to ensure the BMW Group – financial liabilities
solvency of the BMW Group at all times. Achieving this in € million
objective is tackled in three strategic areas: 35,000

1. the ability to act at all times by assuring permanent 30,000
18 General Information on the BMW Group access to strategically important capital markets, 25,000
18 Business Model
2. autonomy through the diversification of refinancing 20,000
23 Report on Economic Position instruments and investors, and 15,000
3. focus on value by optimising financing costs.
Environment 10,000
26 Overall Assessment by Management 5,000
Performance Indicators Financing measures undertaken centrally ensure access
29 Review of Operations to liquidity for the Group’s operating subsidiaries on Maturity (years) within 1 between 1 and 5 later than 5
Position and Net Assets market-based and consistent loan conditions. Funds are
61 Comments on Financial Statements acquired with a view to achieving a desired structure 37,482 37,974 5,193
of BMW AG
64 Events after the End of the for the composition of liabilities, comprising a finely
Reporting Period
tuned mix of various financing instruments. The use
Opportunities of longer-term financing instruments to finance the
65 Outlook
Group’s financial services business and the mainte- During 2014, the BMW Group issued five euro bench-
82 Internal Control System and Risk nance of a sufficiently high liquidity reserve serves to mark bonds with a total issue volume of € 4.25 billion
avoid the liquidity risk intrinsic to any large portfolio on European capital markets. Bonds were also issued
rocess
83 Disclosures Relevant for Takeovers of contracts. This prudent approach to financing also in Canadian dollars, British pounds, US dollars, Aus-
87 BMW Stock and Capital Markets supports BMW AG’s ratings. Further information is tralian dollars and other currencies for a total amount
provided in the “Liquidity risks” section of the “Report of € 6.9 billion.
on outlook, risks and opportunities”.
Nine ABS transactions were executed in 2014, including
Apart from issuing commercial paper on the money two public transactions in the USA and one each in
market, the BMW Group’s financing companies also
issue bearer bonds. In addition, retail customer and
dealer financing receivables on the one hand and BMW Group – financial liabilities
leasing rights and obligations on the other are securi- in € million
tised in the form of asset-backed securities (ABS) financ-
Other
ing arrangements. Financing instruments employed Derivative instruments
by the Group’s in-house banks in Germany and the Commercial paper
USA (e. g. customer deposits) are also used as a supple- Asset backed financing
mentary source of financing. Owing to the increased transactions
use of international money and capital markets to raise Bonds
funds, the scale of funds raised in the form of loans

from international banks is relatively small.
Liabilities to banks
Thanks to its good ratings and the high level of accept-

Liabilities from customer
ance it has on capital markets, the BMW Group was deposits (banking)
again able to refinance operations during the financial
year 2014 at attractive conditions. In addition to the Bonds 35,489
issue of bonds and loan notes on the one hand and pri- Liabilities from customer deposits (banking) 12,466
vate placements on the other, commercial paper was Liabilities to banks 11,554
also issued on good conditions. Additional funds were Asset backed financing transactions 10,884
raised via new securitised instruments and the prolon- Commercial paper 5,599
gation of existing instruments. As in previous years, Derivative instruments 3,143
all issues were highly sought after by private and insti- Other 1,514
tutional investors.
Germany, China and South Africa with a total volume accounted for using the equity method (70.5 %), deferred
equivalent to € 2.7 billion. Further funds were also raised tax assets (27.2 %) and intangible assets (5.2 %). At the
via new ABS conduit transactions in Brazil, Canada, same time, financial assets decreased by 21.9 %.
and Japan totalling € 0.8 billion. Other existing trans
actions remained in place in Switzerland, the UK, Korea Within current assets, increases were registered in par-
and Australia. ticular for receivables from sales financing (9.7 %), in-
ventories (15.6 %), other assets (18.3 %) and current tax
The regular issue of commercial paper also strengthens (65.6 %). Trade receivables went down by 12.1 %.
the BMW Group’s financial basis. The following table
provides an overview of amounts utilised at 31 Decem- The growth in business reported by the Financial Ser-
ber 2014 in connection with the BMW Group’s money vices segment is reflected in increases of € 2,085 million
and capital market programmes: and € 4,822 million in current and non-current receiv
ables from sales financing respectively and in the higher
level of leased products (up by € 4,251 million).
Programme Amount utilised
in € billion Non-current receivables from sales financing accounted
Euro Medium Term Notes 30.9 for 24.2 % (2013: 23.6 %) of total assets, current receiv
Australian Medium Term Notes – ables from sales financing for 15.2 % (2013: 15.5 %). Total
Commercial paper 6.1 receivables from sales financing relate to retail customer
and dealer financing (€ 45,849 million) and finance leases
(€ 15,175 million). Adjusted for exchange rate factors,
The BMW Group’s liquidity position is extremely robust, non-current receivables from sales financing grew by
with liquid funds totalling € 11.7 billion on hand at 31 De- 9.1 %, while current receivables from sales financing
cember 2014. The BMW Group also has access to a went up by 4.8 %. The currency impact was mainly at-
syndicated credit line of € 6 billion, with a term up to tributable to the appreciation in the value of a number
October 2018. This credit line, which is provided on of currencies against the euro, most notably the US dol-
attractive conditions by a consortium of 38 international lar, the British pound and the Chinese renminbi.
banks, had not been utilised at the end of the r eporting
period. At the end of the reporting period, leased products
accounted for 19.5 % of total assets, above their level
Further information with respect to financial liabilities one year earlier (18.7 %). Adjusted for exchange rate
is provided in notes 35, 39 and 43 to the Group Finan- factors, leased products went up by 10.2 %.
cial Statements.
Property, plant and equipment increased by € 2,014 mil-
Net assets position* lion compared to the previous year. The main focus in
The Group balance sheet total increased by € 16,426 mil- 2014 was on product investments for production start-
lion (11.9 %) compared to the end of the previous finan- ups (including the BMW 2 Series Active Tourer, the
cial year to stand at € 154,803 million at 31 December 7 Series Sedan and the 2 Series Gran Tourer) and infra-
2014. Adjusted for exchange rate factors, the balance structure improvements. In total, € 4,539 million (2013:
sheet total increased by 7.5 %. € 4,494 million) was invested, most of which related
to the Automotive segment. Depreciation on property,
On the assets side of the balance sheet, the increase in plant and equipment totalled € 2,924 million (2013:
non-current assets related primarily to receivables € 2,494 million). At 31 December 2014, property, plant
from sales financing (14.8 %), leased products (16.4 %), and equipment accounted for 11.1 % of total assets (2013:
property, plant and equipment (13.3 %), investments 11.0 %). Adjusted for exchange rate factors, property,
plant and equipment increased by 10.8 %. Capital com-
*
Prior year figures have been adjusted in accordance with IAS 8, see note 9. mitments for the acquisition of items of property, plant
56
Balance sheet structure – Group

Total equity and liabilities in € billion
Non-current assets 63 % 24 % Equity
18 COMBINED MANAGEMENT REPORT 62 % 26 %

18 Business Model 38 % Non-current provisions and liabilities
23 Report on Economic Position 37 %
Environment
29 Review of Operations Current assets 37 % 38 % Current provisions and liabilities
38 % 37 %
of BMW AG
Reporting Period thereof cash and cash equivalents 5 % 6 %

*
Opportunities 2014 2013 2013 * 2014
65 Outlook
82 Internal Control System and Risk 155 138 138 155
rocess
Balance sheet structure – Automotive segment
Total equity and liabilities in € billion
Non-current assets 46 % 39 % Equity
46 % 42 %
18 % Non-current provisions and liabilities

Current assets 54 % 16 %
54 %
43 % Current provisions and liabilities
42 %
thereof cash and cash equivalents 7 % 9 %

2014 2013 * 2013 * 2014

79 73 73 79

*
and equipment totalled € 2,247 million at the end of the of the joint venture BMW Brilliance Automotive Ltd.,
reporting period. Shenyang.
Investments accounted for using the equity method, at Deferred tax assets increased by € 441 million to € 2,061 mil-
€ 1,088 million, were € 450 million higher than one year lion, primarily reflecting lower fair values of derivative
earlier, mainly reflecting the strong earnings performance f inancial instruments recognised directly in equity,
r emeasurements of the net defined benefit liability for Trade receivables – which accounted for 1.4 % of total
pension plans and currency factors (in particular relating assets (2013: 1.8 %) – went down over the twelve-month
to the US dollar). period by € 296 million. Adjusted for exchange rate fac-
tors, they decreased by 15.8 %.
At € 6,499 million, the carrying amount of intangible as-
sets was € 320 million higher than at 31 December 2013. At € 7,688 million, cash and cash equivalents were
Within intangible assets, capitalised development costs almost identical to their level one year earlier (2013:
rose by € 431 million. Investments in capitalised develop- € 7,671 million).
ment costs totalled € 1,499 million in the year under re-
port and were thus significantly lower than in the pre The main increase on the equity and liabilities side of
vious year (2013: € 1,744 million). In the previous year, the balance sheet in percentage terms related to pen-
additions to intangible assets included licenses acquired sion provisions (99.9 %). Increases were also recorded
for € 379 million which are being amortised on a straight- for non-current and current financial liabilities (9.4 %
line basis over a period of six years. The proportion of and 21.5 % respectively), equity (5.2 %), current and
development costs recognised as assets was 32.8 % (2013: non-current other provisions (32.5 % and 11.5 % respec-
36.4 %). Adjusted for exchange rate factors, intangible tively) and current and non-current other liabilities
assets increased by 5.1 %. In total, € 1,561 million was in- (10.1 % and 18.7 % respectively). By contrast, current
vested in intangible assets, most of which related to the tax and deferred tax liabilities went down by 31.4 % and
Automotive segment. 19.7 % respectively.
Total capital expenditure on intangible assets and prop- Pension provisions jumped by € 2 , 301 million to
erty, plant and equipment as a percentage of revenues € 4,604 million, mainly as a result of the lower discount
decreased to 7.6 % (2013: 8.8 %). Capital commitments factors used in Germany, the UK and the USA.
for intangible assets totalled € 750 million at the end of
the reporting period. Current and non-current financial liabilities increased
from € 70,304 to € 80,649 million over the twelve-month
Non-current financial assets decreased by € 569 million period. Within financial liabilities, derivative instru-
to € 2,024 million, mainly due to lower fair values of cur- ments went up from € 1,103 million to € 3,143 million,
rency derivatives. mostly reflecting the negative impact of currency and
commodity derivatives. Additional increases within
Within current assets, receivables from sales financing financial liabilities included ABS transactions (7.5 %),
grew from € 21,501 million to € 23,586 million, mostly bonds (16.9 %) and liabilities to banks (34.5 %). By con-
reflecting the general growth of Financial Services busi- trast, commercial paper d ecreased by 11.0 %. Adjusted
ness on the one hand and currency factors on the other. for exchange rate factors, non-current and current
financial liabilities increased by 5.0 % and 17.1 % respec-
Compared to the end of the previous year, inventories tively.
increased by € 1,494 million (15.6 %) to € 11,089 million
and accounted for 7.2 % (2013: 6.9 %) of total assets. Most Group equity rose by € 1,837 million to € 37,437 million,
of the increase related to finished goods, including the increased primarily by the profit attributable to share-
impact of stocking up in conjunction with the introduc- holders of BMW AG (€ 5,798 million) and currency
tion of new models. Adjusted for exchange rate factors, translation differences (€ 764 million) and decreased
the increase was 11.6 %. mainly by remeasurements of the net defined benefit
liability for pension plans (€ 2,298 million) mainly due
Current other assets were € 780 million higher than one to the lower discount rates used in Germany, the United
year earlier, mainly due to increases in prepayments, Kingdom and the USA. Fair value measurement had a
receivables from other companies in which an invest- negative impact in the case of derivative financial in-
ment is held and other taxes as well as the reclassifica- struments (€ 2,194 million) and a positive impact in the
tion described in note 31. These increases were partly case of marketable securities (€ 40 million). Deferred
offset by the decrease in collateral receivables included taxes on items recognised directly in equity increased
in this line item. equity by € 1,438 million.
58
Income and expenses relating to equity accounted in- details, including an analysis of remuneration by each
vestments and recognised directly in equity (before tax) individual, are disclosed in the Compensation Report,
reduced equity by € 48 million. which can be found in the section “Statement on Corpo-
rate Governance”. The Compensation Report is a sub-
18 General Information on the BMW Group The dividend payment decreased equity by € 1,707 mil- section of the Combined Management Report.
18 Business Model
lion. Minority interests increased by € 29 million. A
23 Report on Economic Position portion of the Authorised Capital 2014 created at the Value added statement*
Annual General Meeting held on 14 May 2009 in con- The value added statement shows the value of work per-
Environment
26 Overall Assessment by Management junction with the Employee Share Programme was used formed less the value of work bought in by the BMW
Performance Indicators during the financial year under report to issue shares Group during the financial year. Depreciation and amor-
29 Review of Operations of preferred stock to employees. An amount of € 15 mil- tisation, cost of materials and other expenses are treated
Position and Net Assets lion was transferred to capital reserves in conjunction as bought-in costs in the value added calculation. The
61 Comments on Financial Statements with this share capital increase. allocation statement applies value added to each of the
of BMW AG
64 Events after the End of the participants involved in the value added process. It
Reporting Period
The equity ratio of the BMW Group fell overall by 1.5 per- should be noted that the gross value added amount treats
Opportunities centage points to 24.2 %. The equity ratio of the Auto- depreciation as a component of value added which, in
65 Outlook
motive segment was 39.2 % (2013: 42.4 %) and that of the the allocation statement, is treated as internal financing.
82 Internal Control System and Risk Financial Services segment was 8.8 % (2013: 9.1 %).
Net value added by the BMW Group in 2014 increased
rocess
83 Disclosures Relevant for Takeovers Other provisions increased from € 7,240 million to by 7.3 % to € 20,620 million and was once again at a high
87 BMW Stock and Capital Markets € 8,790 million during the year under report, mainly re- level.
flecting allocations to provisions for personnel-related
expenses and ongoing operational expenses as well as The bulk of the net value added (47.4 %) is again applied
the reclassification described in note 31. to employees. The proportion applied to providers of
finance fell to 8.4 %, mainly due to the lower refinancing
The € 711 million increase in current other liabilities was costs on international capital markets for the financial
attributable to the expansion of service and leasing busi- services side of the business. The government / public
ness and the related impact on amounts recognised as sector (including deferred tax expense) accounted for
deferred income. In addition, value added tax payables 16.0 %. The proportion of net value added applied to
were higher than at the end of the previous financial shareholders, at 9.2 %, was higher than in the previous
year as a result of the higher volume of vehicles sold. year. Minority interests take a 0.1 % share of net value
added. The remaining proportion of net value added
Deferred tax liabilities fell by € 485 million to € 1,974 mil- (18.9 %) will be retained in the Group to finance future
lion as a result of lower fair values of derivative financial operations.
instruments recognised directly in equity, remeasure-
ments of the net defined benefit liability for pension
plans and currency factors. The € 729 million decrease
in current tax liabilities to € 1,590 million was mainly at-
tributable to a tax payment in the USA.
Overall, the results of operations, financial position and

net assets position of the BMW Group continued to de-
velop positively during the financial year under report.
Compensation Report
The compensation of the Board of Management com-
prises both a fixed and a variable component. Benefits
are also payable – primarily in the form of pension
benefits – at the end of members’ mandates. Further *
BMW Group value added statement
2014 2014 20131 20131 Change

in € million in % in € million in % in %
Work performed
Revenues 80,401 98.7 76,059 98.3
Financial income 156 0.2 464 0.6
Other income 877 1.1 842 1.1
Total output 81,434 100.0 77,365 100.0 5.3
Cost of materials2 44,078 54.1 42,681 55.2

Other expenses 9,012 11.1 8,420 10.9
Bought-in costs 53,090 65.2 51,101 66.1 3.9
Gross value added 28,344 34.8 26,264 33.9 7.9

Depreciation and amortisation 7,724 9.5 7,047 9.1
Net value added 20,620 25.3 19,217 24.8 7.3
Applied to
Employees 9,764 47.4 8,992 46.9 8.6
Providers of finance 1,733 8.4 1,813 9.4 – 4.4
Government / public sector 3,306 16.0 3,083 16.0 7.2
Shareholders 1,904 9.2 1,707 8.9 11.5
Group 3,894 18.9 3,596 18.7 8.3
Minority interest 19 0.1 26 0.1 – 26.9
Net value added 20,620 100.0 19,217 100.0 7.3
1
2 Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).
BMW Group value added 2014

in %
47.4 % Employees
Depreciation and amortisation
Other expenses
Net value added 8.4 % Providers of finance

16.0 % Government / public sector
Cost of materials
9.2 % Shareholders
18.9 % Group
0.1 % Minority interest

Net value added 25.3 Depreciation and amortisation 9.5
Cost of materials 54.1 Other expenses 11.1

60
Key performance figures
2014 2013 *

18 General Information on the BMW Group Group gross margin % 21.2 20.1
18 Business Model
20 Management System Group EBITDA margin % 16.5 15.4
23 Report on Economic Position Group EBIT margin % 11.3 10.5
Environment Group pre-tax return on sales % 10.8 10.4
Group post-tax return on sales % 7.2 7.0
Performance Indicators Group pre-tax return on equity % 24.5 25.8
Group post-tax return on equity % 16.3 17.4
Position and Net Assets Group equity ratio % 24.2 25.7
of BMW AG
Automotive equity ratio % 39.2 42.4
64 Events after the End of the Financial Services equity ratio % 8.8 9.1
Reporting Period
65 Report on Outlook, Risks and Coverage of intangible assets, property, plant and equipment by equity (Group) % 158.1 166.8
Opportunities Return on capital employed
65 Outlook
70 Report on Risks and Opportunities Group % 20.8 21.4
82 Internal Control System and Risk Automotive % 61.7 63.0
rocess Motorcycles % 21.8 16.4
Return on equity
87 BMW Stock and Capital Markets Financial Services % 19.4 20.0
Cash inflow from operating activities (Group) € million 2,912 4,127
Cash outflow from investing activities (Group) € million – 6,116 – 7,491
Coverage of cash outflow from investing activities by cash inflow from operating activities (Group) % 47.6 55.1
Free cash flow of Automotive segment € million 3,481 3,003
Net financial assets Automotive segment € million 14,223 12,085
*

Comments on Financial Statements of BMW AG
Bayerische Motoren Werke Aktiengesellschaft (BMW AG), related to Europe and North America. Sales to Group
which is based in Munich, Germany, is the parent com- entities accounted for € 50.7 billion or 76.1 % of total
pany of the BMW Group. The comments on the BMW revenues of € 66.6 billion. Cost of sales developed roughly
Group and Automotive segment provided in earlier sec- in line with revenues, as a result of which gross profit
tions are also relevant for BMW AG, unless presented increased by € 1,380 million to € 14,787 million.
differently in the following section. The Financial State-
ments of BMW AG are drawn up in accordance with At € 3,533 million, selling expenses were at a similar level
the provisions of the German Commercial Code (HGB) to the previous year (2013: € 3,528 million).
and the relevant supplementary provisions contained
in the German Stock Corporation Act (AktG). Administrative expenses were 5.5 % up on the previous
year, mainly as a result of higher expenses for centralised
The main financial and non-financial performance in IT activities and new IT projects.
dicators relevant for BMW AG are largely identical and
synchronous with those of the Automotive segment Research and development expenses fell by 4.8 %, mainly
of the BMW Group and are described in detail in the reflecting the production start of various development-
“Report on Economic Position” section of the Combined intensive vehicle projects in the previous year. Most of
Management Report. the expense incurred for research and development ac-
tivities related to new vehicle models, drive systems and
Differences between the accounting policies used in the innovative technologies.
BMW AG financial statements (prepared in accordance
with HGB) and the BMW Group Financial Statements The decrease in net other operating income and ex-
(prepared in accordance with IFRSs) arise primarily in penses was attributable mainly to the higher net nega-
connection with the accounting treatment of intangible tive impact of realised exchange rate factors on the
assets, financial instruments, provisions and deferred one hand and to higher allocations to provisions for
taxes. commodity and currency hedging contracts on the
other.
Business environment and review of operations
The general and sector-specific environment in which The financial result deteriorated year-on-year by € 121 mil-
the BMW AG operates is the same as that for the BMW lion, mainly due to the impairment loss (€ 196 million)
Group and is described in the “Report on Economic recognised on the investment in SGL Carbon SE,
Position” section of the Combined Management Report. Wiesbaden, which was written down to its lower mar-
ket value at the end of the reporting period. Higher
BMW AG develops, manufactures and sells cars and interest income and lower interest expenses had a posi-
motorcycles as well as spare parts and accessories manu- tive impact.
factured by itself, foreign subsidiaries and external sup-
pliers. Sales activities are carried out through branches, The profit from ordinary activities increased from
subsidiaries, independent dealers and importers. In € 3,963 million to € 5,163 million.
2014, BMW AG was able to increase its sales volume by
170,869 units to 2,166,772 units. This figure includes The expense for income taxes relates primarily to cur-
287,466 units relating to series sets supplied to the joint rent tax for the financial year 2014.
venture BMW Brilliance Automotive Ltd., Shenyang,
an increase of 72,517 units over the previous year. At After deducting the expense for taxes, the Company
31 December 2014, BMW AG had 80,675 employees, reports a net profit of € 3,229 million compared to
3,565 more than one year earlier. € 2,289 million in the previous year.
Results of operations, financial position and net assets Capital expenditure on intangible assets and property,
Revenues increased by 10.1 % compared to the previous plant and equipment in the year under report amounted
year, driven principally by higher sales volume on the to € 3,150 million (2013 : € 3,203 million). The main
one hand and the positive impact of the model mix on reason for this 1.7 % decrease was the acquisition of
the other. In geographical terms, most of the increase licences in the previous year. Product investments for
62
production start-ups of new models increased year-on- The carrying amount of investments decreased from
year. Depreciation and amortisation amounted to € 3,377 million to € 3,236 million, mainly as a result of an
€ 1,890 million (2013: € 1,732 million). impairment loss recognised in 2014.
18 Business Model BMW AG Balance Sheet at 31 December
23 Report on Economic Position in € million
23 General and Sector-specific 2014 2013
Environment
26 Financial and Non-financial Assets
29 Review of Operations Intangible assets 405 474
Property, plant and equipment 10,304 8,982
61 Comments on Financial Statements Investments 3,236 3,377
of BMW AG
Tangible, intangible and investment assets 13,945 12,833
Reporting Period
Opportunities
Inventories 3,859 3,863
65 Outlook Trade receivables 697 659
82 Internal Control System and Risk Receivables from subsidiaries 5,200 4,871
Management System Relevant for the Other receivables and other assets 2,502 3,194
rocess
83 Disclosures Relevant for Takeovers Marketable securities 3,572 3,429
and Explanatory Comments Cash and cash equivalents 3,073 3,757
Current assets 18,903 19,773
Prepayments 265 169

Surplus of pension and similar plan assets over liabilities 1,123 990
Total assets 34,236 33,765
Equity and liabilities

Subscribed capital 656 656
Capital reserves 2,084 2,069
Revenue reserves 7,422 6,097
Unappropriated profit available for distribution 1,904 1,707
Equity 12,066 10,529
Registered profit-sharing certificates 31 32
Pension provisions 12 43

Other provisions 7,308 7,299
Provisions 7,320 7,342
Liabilities to banks 1,864 1,463

Trade payables 4,784 4,818
Liabilities to subsidiaries 6,872 8,795
Other liabilities 216 285
Liabilities 13,736 15,361
Deferred income 1,083 501

Total equity and liabilities 34,236 33,765
BMW AG Income Statement

in € million
2014 2013
Revenues 66,599 60,474

Cost of sales – 51,812 – 47,067
Gross profit 14,787 13,407
Selling expenses – 3,533 – 3,528

Administrative expenses – 2,259 – 2,141
Research and development expenses – 4,152 – 4,362
Other operating income and expenses 28 542
Result on investments 741 373
Financial result – 449 – 328
Profit from ordinary activities 5,163 3,963
Income taxes – 1,884 – 1,629

Other taxes – 50 – 45
Transfer to revenue reserves – 1,325 – 582

Unappropriated profit available for distribution 1,904 1,707
At € 3,859 million, inventories were practically identical In order to secure obligations resulting from pre-retire-
to the end of the previous year (2013: € 3,863 million). ment part-time work arrangements and the Company’s
pension obligations, assets have been transferred to
The decrease in other receivables and other assets to BMW Trust e.V., Munich, in conjunction with Contrac-
€ 2,502 million (2013: € 3,194 million) was mainly attribut- tual Trust Arrangements (CTA), on a trustee basis. The
able to the lower volume of genuine repurchase (repo) assets concerned comprise mainly holdings in investment
transactions in place at the end of the reporting period. fund assets and a receivable resulting from a so-called
“Capitalisation Transaction” (Kapitalisierungsgeschäft).
Liquidity within the BMW Group is managed centrally by Fund assets are offset against the related guaranteed
BMW AG on the basis of a group-wide liquidity concept, obligations. The resulting surplus of assets over liabilities
which revolves around the strategy of concentrating a is reported in the BMW AG balance sheet on the line
significant part of the Group’s liquidity at the level of “Surplus of pension and similar plan assets over liabili-
BMW AG. An important instrument used to achieve this ties”.
aim is the cash pool headed by BMW AG. The liquidity
position reported by BMW AG therefore reflects the Pension provisions, net of designated plan assets, de-
global activities of BMW AG and other Group companies. creased from € 43 million to € 12 million.
Cash and cash equivalents went down by € 684 million At € 4,784 million, trade payables were at a similar level
to € 3,073 million. This decrease mainly reflected the to the previous year (2013: € 4,818 million).
repayment of intragroup borrowings, as a result of
which intragroup refinancing volumes also reduced Liabilities to banks increased in conjunction with a
significantly. number of project-related loans.
Equity rose by € 1,537 million to € 12,066 million, while Other liabilities fell from € 285 million to € 216 million,
the equity ratio improved from 31.2 % to 35.2 %. mainly as a result of the expiry of option contracts.
64

Events after the End of the Reporting Period
Deferred income went up by € 582 million to € 1,083 mil- Events after the end of the reporting period
lion, mainly reflecting the increased volume of services No events have occurred since the end of the reporting
still to be performed for service and maintenance con- period which could have a major impact on the results
tracts in conjunction with multi-component business. of operations, financial position and net assets of
18 General Information on the BMW Group BMW AG or the BMW Group.
18 Business Model
Risks and opportunities
23 Report on Economic Position BMW AG’s performance is highly dependent on the
same set of risks and opportunities that affect the BMW
Environment
26 Overall Assessment by Management Group and which are described in detail in the “Report
Performance Indicators on Outlook, Risks and Opportunities” section of the Com-
29 Review of Operations bined Management Report. As a general rule, BMW AG
Position and Net Assets participates in the risks entered into by Group entities
61 Comments on Financial Statements on the basis of the relevant shareholding percentage.
of BMW AG
Reporting Period
BMW AG is integrated in the group-wide risk manage-
Opportunities ment system and internal control system of the BMW
65 Outlook
Group. Further information is provided in the “Internal
82 Internal Control System and Risk Control System and Risk Management System Relevant
for the Consolidated Financial Reporting Process” sec-
rocess
83 Disclosures Relevant for Takeovers tion of the Combined Management Report.
Outlook
Due to its dominant role in the Group and its close ties
with Group entities, expectations for the BMW AG with
respect to the Company’s financial and non-financial
performance indicators correspond largely to the BMW
Group’s outlook for the Automotive segment, which is
described in detail in the “Report on Outlook, Risks
and Opportunities” section of the Combined Manage-
ment Report.
KPMG AG Wirtschaftsprüfungsgesellschaft, Munich,

has issued an unqualified audit opinion on the financial
statements of BMW AG, of which the balance sheet and
the income statement are presented here. The BMW AG
financial statements for the financial year 2014 will be
submitted to the operator of the electronic version of the
German Federal Gazette and can be obtained via the
Company Register website. These financial statements
are available from BMW AG, 80788 Munich, Germany.
Report on Outlook, Risks and Opportunities

Outlook
The report on outlook, risks and opportunities describes cant risk factors. Various uncertainties prevail in Europe,
the expected development of the BMW Group, together in particular with respect to future developments in
with associated material risks and opportunities, from Greece as well as in Russia and neighbouring countries.
the perspective of Group management. The outlook In addition, an interest rate turnaround is likely to take
covers a period of one year, in line with the Group’s in- place in the USA. The global economy could also be
ternal management system. By contrast, risks and oppor- negatively impacted by high public debt levels in Europe,
tunities are managed on the basis of a two-year assess- the USA and Japan, as well as political developments in
ment. The report on risks and opportunities therefore the Middle East and East Asia. More detailed informa-
covers a period of two years. tion on these matters can be found in the section “Politi-
cal and global economic risks” in the risk report.
The report on outlook, risks and opportunities contains
forward-looking assertions based on the BMW Group’s It seems likely that the upswing in the eurozone will
expectations and assessments, which are, by their nature, continue in 2015, albeit at a low level, based on an ex-
subject to uncertainty. As a result, actual outcomes, in- pected growth rate of 1.1 %. Europe’s largest economy,
cluding those attributable to political and economic de- Germany, is forecast to grow by approximately 1.4 %.
velopments, could differ substantially – either positively France is likely to see an increase of around 0.9 %. Italy
or negatively – from the expectations described below. should come out of recession in 2015 with a positive
Further information can be found in the section “Report growth rate of 0.4 %. The upswing in Spain seems set
on risks and opportunities”. to continue with growth edging up to 2.0 %. The United
Kingdom’s economy is likely to remain strong and grow
Outlook by a further 2.7 % in 2015.
Assumptions used in the outlook
The following outlook relates to a forward-looking Despite the anticipated interest rate turnaround in the
period of one year and is based on the composition of USA, we expect growth to remain at its current high
the BMW Group during that period. The outlook takes level. A growth rate of 3.2 % is forecast for 2015, reflect-
account of all information known up to the date on ing the expectation that the boom on the employment
which the financial statements are authorised for issue and property markets will remain intact.
and which could have a material impact on the course
of business of the BMW Group. The expectations con- In view of the negative impact on Japan’s economy
tained in the outlook are based on the BMW Group’s caused by the value added tax hike in 2014, the Japanese
forecasts for 2015 and reflect the most recent status. government has decided to postpone the second step –
The basis for the preparation of and the principal as- originally envisaged for 2015 – until 2017. Under these
sumptions used in our forecasts, which take account circumstances, we forecast a growth rate of 1.0 % for the
of consensual opinions of leading organisations, such year 2015.
as economic research institutes and banks, are set out
below. The BMW Group’s forecast is drawn up on the Economic growth in China is likely to slow down again
basis of these assumptions. slightly in 2015 to a rate of 7.0 %. The prerequisite for
this forecast is that price falls on the property market do
Our continuous forecasting process ensures that the not have any lasting adverse impact on the macroeco-
BMW Group is always ready to take advantage of oppor- nomic trend.
tunities as they arise and to react appropriately to un
expected risks. The principal risks and opportunities The Indian economy seems to be recovering now that
are described in detail in the section “Report on risks the presidential elections are over and should grow by
and opportunities”. The risks and opportunities dis- 6.2 % in 2015. The recovery in Brazil is only likely to be
cussed in that section are relevant for all of the BMW a very modest 0.5 %. Russia is being negatively impacted
Group’s key performance indicators and could result in particular by lower oil prices and economic sanctions
in variances between the outlook and actual outcomes. imposed in the wake of the unresolved Ukraine con-
flict. Forecasts, which are currently being adjusted fur-
Economic outlook for 2015 ther downwards, indicate a 4.1 % drop in Russian GDP.
For the purposes of the outlook, we assume that the
global economy will continue its moderate upswing in Currency markets
2015 and grow by 3.5 %. Over-capacities and price Currencies which have the greatest impact on the BMW
bubbles on the Chinese property market remain signifi- Group’s international business, such as the US dollar,
66
but also the Chinese renminbi, the British pound and is forecast to rise by 2.1 % to 3.1 million. The French
the Japanese yen, could well be subject to a significant market is expected to grow by 6.7 % to 1.9 million units,
degree of fluctuation again in 2015. the Italian market by 2.1 % to 1.4 million units. The
economic upturn in Spain should maintain momentum
18 General Information on the BMW Group The expected interest rate turnaround in the USA, low and result in a further steep rise in car sales in the cur-
18 Business Model
inflation in Europe and the fragile state of Europe’s rent year (0.95 million units; + 11.3 %). The UK car market
23 Report on Economic Position economy, suggest that the US dollar will again tend to is likely to remain flat in 2015, with registrations down
perform strongly against the euro in 2015. marginally by 0.5 % to approximately 2.5 million units.
Environment
Performance Indicators The Chinese renminbi is likely to remain relatively closely Car registrations in Japan are forecast to be in the region
29 Review of Operations coupled with the US dollar over the coming year. In the of 4.8 million units and hence about 10.0 % lower than
Position and Net Assets long term, however, it seems likely that volatility will in the previous year.
61 Comments on Financial Statements increase, following the announcement that capital mar-
of BMW AG
64 Events after the End of the kets in China are to be liberalised. In the case of car markets in major emerging econo-
Reporting Period
mies, we predict some highly divergent developments.
Opportunities The Japanese yen, which has lost significant ground Due to the prevailing economic and political situation,
65 Outlook
against the euro since mid-2012, is not expected to see a Russia is expected to see a further 21.8 % drop to 1.8 mil-
82 Internal Control System and Risk rapid recovery, given that the Japanese central bank is lion units. The Brazilian car market is also likely to con-
unlikely to change its monetary and exchange rate poli- tract slightly again in 2015 by approximately 2.0 % to
rocess
83 Disclosures Relevant for Takeovers cies in the near future. 3.3 million units.
The current healthy state of the UK economy and the Motorcycle markets in 2015
expected turnaround in interest rates that the Bank of The markets for 500 cc plus motorcycles are again likely
England is likely to set in motion could well strengthen to continue their upward trend in 2015, albeit on a
the British pound somewhat in the short and medium modest scale. Registrations are expected to rise slightly
term. across Europe, including increases on a similar scale
for the major motorcycle markets in Germany, Italy and
The currencies of many emerging economies are expected France. The USA is also likely to see a continuation of
to remain under pressure against the US dollar in the the positive trend.
foreseeable future, due to the normalisation of US mon-
etary policies, which is likely to get under way in 2015. Financial Services sector in 2015
Countries with current account and fiscal deficits are The normalisation of monetary policies in the USA is
most likely to be affected. Due to the expansionary mon- expected to continue throughout the coming year. The
etary policies of the ECB, emerging market currencies first steps in the direction of a slight rise in interest
will tend to gain in value against the euro. The rouble rates might be taken in summer 2015. The current debt
will remain on the weak side until political tensions have situation, however, precludes any rapid interest rate
eased. increases in the USA. In Europe, by contrast, the ECB
will proceed with the plans it has already announced
Car markets for a large scale bond-buying programme as inflation
We expect global car markets to grow in the current year remains low in the first half of 2015. A weakly perform-
by approximately 3.0 % to 83.1 million units. The US ing economy and a low inflation rate will maintain the
market is forecast to grow by around 2.9 % to 17.0 mil- pressure on the Bank of Japan to intervene. We there-
lion units. Our prediction for passenger car registra- fore expect it to r etain its expansionary monetary poli-
tions in China is a rise of around 10.0 % to 20.3 million cies and continue to buy government bonds. Reference
units. interest rates in the eurozone and Japan are therefore
set to remain at historically low levels at least until the
The majority of Europe’s car markets should continue end of 2015.
to recover in 2015. The region’s core markets, however,
are only likely to see growth on a modest scale. The We expect the pattern of credit risks worldwide to re-
number of new registrations in Germany, for instance, main more or less stable during the current year.
Stable conditions are also predicted for used car mar- levels of upfront expenditure to safeguard business
kets in Asia and Europe in 2015, while price levels in viability going forward and future challenges arising in
North America are, at the most, only likely to fall the wake of the normalisation of the Chinese market.
slightly. A number of risks will also have to be faced, including
the precarious state of the Russian market and macro
Expected impact on the BMW Group in 2015 economic uncertainties in Europe (see the section “Po-
Future developments on international automobile mar- litical and global economic risks” in the risk report).
kets also have a direct impact on the BMW Group. We expect our attractive model range to generate positive
While competition is likely to intensify in contracting momentum, which will help us achieve our target of
markets, new opportunities are opening in growth balanced growth on all major markets.
regions. In some countries, sales volumes will be influ-
enced to a great extent by the way we tackle new com- Workforce at year-end: solid increase expected
petitive challenges. After the uncertainties that have The BMW Group will continue to recruit staff in 2015
dominated recent years, we expect Europe to generate and, based on our latest forecasts, we expect a solid in-
some positive momentum again, albeit on a slight scale. crease in the size of the workforce (2014: 116,324 em-
North America and China are likely to see a continua- ployees), driven by car and motorcycle sales growth and
tion of the positive trend in 2015. In contrast, the situa- the rapid pace of innovation.
tion on the Russian car market can be expected to re-
main tense over the forecast period. Automotive segment in 2015
Deliveries to customers: solid increase expected
As an enterprise with global operations, the BMW We expect the pace of growth in the Automotive seg-
Group is ideally placed to exploit opportunities that ment to remain high in 2015. Assuming economic
arise and thus compensate for unfavourable develop- conditions continue to be stable, we predict a solid rise
ments in other regions. Thanks to its strong brands, we in deliveries to customers (2014: 2,117,965 units) to
forecast continued profitable growth for the BMW achieve a new high level, which will, in all probability,
Group in the current year. We will push ahead with in- enable the BMW Group to maintain its position as the
vestments in innovation, future technologies and the world’s foremost premium car manufacturer in 2015.
further internationalisation of our production network
in 2015. As a manufacturer of premium vehicles, we will Attractive new models and dynamic market conditions,
continue to profit from strong worldwide demand in particularly in North America, should have a positive
this segment. Given all these factors, we forecast that impact on car sales. After some negative developments
the BMW Group will remain the world’s leading pre- in recent years, the European car markets are expected
mium manufacturer in 2015. to recover slightly overall. Nevertheless, the market en-
vironment is likely to remain challenging.
Our highly flexible international production network
enables us to compensate for even substantial fluctua- The new 2 Series Convertible was added to the BMW 2 Se-
tions in demand. Investing in major growth markets ries with effect from the end of February. Its predeces-
provides the basis for the continued success of the BMW sor, the 1 Series Convertible, achieved worldwide sales
Group. We attach great importance to ensuring that of more than 130,000 units and was therefore the un-
the global distribution of our sales remains balanced, disputed leader in its class.
while simultaneously expanding the global presence of
the BMW Group. In April, the four-wheel drive BMW X5 M and X6 M will
come onto the market. These high-performance models
Outlook for the BMW Group in 2015 combine the characteristic features of the successful
The BMW Group in 2015 BMW X family – exclusivity, robustness, agility and every
Profit before tax: solid increase expected day usability – with the commitment to high perfor-
The BMW Group will remain on course in 2015 and mance that defines an M car.
forecasts a solid increase in Group profit before tax
compared to the preceding year (2014: € 8,707 million). The new facelift of the BMW 1 Series, unveiled at the
However, the scale of the increase during the forecast Geneva Motor Show, will provide additional sales
period is likely to be held down by intense competition momentum. With a fully revamped engine range and
on car markets, rising personnel costs, continued high additional features that reduce fuel consumption and
68
emissions, the new BMW 1 Series will again be playing Carbon fleet emissions*: slight decrease expected
a pioneering role in the introduction of newly devel- Regulations for vehicle carbon emissions are becoming
oped BMW EfficientDynamics technologies. The seven- continually stricter worldwide. The BMW Group com-
seater BMW 2 Series Gran Tourer also made its world mitted itself at an early stage to meeting future legal
18 General Information on the BMW Group debut in Geneva, heralding the BMW Group’s entry requirements with the aid of its innovative Efficient
18 Business Model
into a new vehicle segment. With its generous interior Dynamics technology package. The increasing scope of
23 Report on Economic Position spaciousness, versatility and flexibility, the BMW 2 Se- electrification in our vehicle fleet is enabling us to play
ries Gran Tourer is the first BMW to be launched in the a pioneering role in reducing both carbon emissions
Environment
26 Overall Assessment by Management multi-purpose vehicle segment. and fuel consumption. At the same time, our vehicles
Performance Indicators also set standards in terms of sporting flair and dynamic
29 Review of Operations The BMW 6 Series Coupé, Gran Coupé and Convertible driving pleasure.
Position and Net Assets model upgrades were presented in January and will
61 Comments on Financial Statements come onto the market in spring 2015. The new 6 Series We will continue to work hard in the current year to re-
of BMW AG
64 Events after the End of the satisfies the most exacting requirements for luxury- duce carbon emissions across the entire fleet. Overall,
Reporting Period
segment sporting vehicles in terms of dynamic driving we expect fleet emissions to decrease slightly in 2015
Opportunities performance, comfort, technology and elegance. (2014: 130 grams CO2 / km).
65 Outlook
82 Internal Control System and Risk The highly efficient BMW X5 xDrive40e comes onto the Revenues: solid increase expected
market in 2015. It is the first BMW brand Sports Activity The generally positive business trend predicted for the
rocess
83 Disclosures Relevant for Takeovers Vehicle to combine the intelligent BMW xDrive all-wheel BMW Group is also expected to have a positive impact
87 BMW Stock and Capital Markets drive system with a more advanced plug-in hybrid on Automotive segment revenues. Accordingly, we fore-
system, and represents a further important step in the cast solid revenue growth for the forecast period (2014:
transfer of innovative drivetrain systems from BMW i € 75,173 million).
models to the BMW Group’s core brand.
EBIT margin in target range between 8 and 10 % expected
Preparations for the new BMW 7 Series are already An EBIT margin within a range of between 8 and 10 %
under way at the Dingolfing plant. Intelligent composite (2014: 9.6 %) remains the target for the Automotive
construction in the new BMW 7 Series and the imple- segment.
mentation of carbon fibre (CFRP) technology will set new
standards in the market. We expect to see a moderate drop in segment RoCE
(2014: 61.7 %). However, the long-term target RoCE of at
We also expect the MINI brand to generate new sales least 26 % for the Automotive segment will be clearly
momentum in 2015, driven, among other factors, by the surpassed.
low average age of its model range (2.5 years). The new
MINI Clubman will be presented in 2015 and will excel Motorcycles segment in 2015
with a wide range of high-value details, plenty of room Deliveries to customers: solid increase expected
for functionality and outstanding materials. We expect the Motorcycles segment’s upward trend to
continue, helped by a positive contribution from the
The Araquari plant in Brazil commenced production of new models – R 1200 R, R 1200 RS, S 1000 RR, S 1000 XR
BMW brand vehicles in autumn 2014. The completion and F 800 R – presented at the autumn trade fairs. Within
of the new production site is scheduled for 2015. The a positive market environment, we forecast a solid in-
plant will have a planned annual capacity of up to crease in BMW motorcycle sales in the forecast period
30,000 units. The BMW Group is also increasing pro- (2014: 123,495 units).
duction capacities in the USA. After the expansion
of the Spartanburg plant has been completed, up to
450,000 vehicles per year will roll off the production
lines as from the end of 2016. *
EU-28.
Return on capital employed in line with last year’s level thus reflecting the solid growth in sales volume and
expected revenues anticipated by the Automotive segment. At
We expect the impetus provided by the new models the same time, we expect a slight decrease in carbon
will help keep segment RoCE in line with last year’s emissions from our fleet of vehicles. We aim to achieve
level (2014: 21.8 %). profitable growth through a solid increase in the size
of the workforce across the Group. The Automotive seg-
Financial Services segment in 2015 ment’s EBIT margin will remain within the target range
Return on equity in line with last year’s level expected of between 8 and 10 %. Based on the planned level of
Based on our assessment, the Financial Services segment capital expenditure, we expect a moderate decrease in
will continue to perform well in 2015. Despite rising the Automobile segment’s RoCE. The Financial Services
equity capital requirements worldwide, we forecast RoE segment’s RoE should remain in line with last year’s
in line with last year’s level (2014: 19.4 %), thus remain- level. Both performance indicators will be nevertheless
ing ahead of the target of at least 18 %. higher than their long-term targets of 26 % and 18 %
respectively. For the Motorcycles segment, we forecast
Overall assessment by Group management for 2015 a solid increase in sales volume and RoCE in line
We forecast a continuation of the upward trend in 2015 with last year’s level. Depending on the political and
and expect to achieve profitable growth on the back economic situation and the outcome of the risks and
of a range of factors, including the introduction of new opportunities described below, actual business per
models. Despite the aforementioned challenges, Group formance could, however, differ from our current ex-
profit before tax is forecast to achieve a solid increase, pectations.
Principal performance indicators
2014 2015
Outlook
BMW Group
Workforce at end of year 116,324 solid increase
Profit before tax € million 8,707 solid increase
Automotive segment
Sales volume1 units 2,117,965 solid increase
Fleet emissions 2 g CO2 / km 130 slight decrease
Revenues € million 75,173 solid increase
EBIT margin % 9.6 unchanged between 8 and 10
Return on capital employed % 61.7 moderate decrease
Motorcycles segment
Sales volume units 123,495 solid increase
Return on capital employed % 21.8 in line with last year’s level

Return on equity % 19.4 in line with last year’s level
1
henyang (2014: 275,891 units).
2
EU-28.
70
Report on Outlook, Risks and Opportunities

Report on Risks and Opportunities
As a world-leading manufacturer of premium cars and The scope of entities covered by the report on risks
motorcycles and provider of premium financing and and opportunities corresponds to the scope of consoli-
mobility services, the BMW Group is exposed to numer- dated entities included in the BMW Group Financial
ous uncertainties and changes. Making full use of the Statements.
18 General Information on the BMW Group opportunities that present themselves is the basis for its
18 Business Model
corporate success. In order to achieve growth, profita- Risk management system
23 Report on Economic Position bility, efficiency and sustainable levels of business in the The objective of the risk management system and one of
future, the BMW Group consciously takes certain risks. the key functions of risk reporting is to identify, record
Environment
26 Overall Assessment by Management and actively manage internal and external risks which
Performance Indicators The prudent management of opportunities and risks is pose a threat to the attainment of corporate targets. The
29 Review of Operations a fundamental prerequisite for the ability to react appro- risk management system covers all significant risks to
Position and Net Assets priately to changes in political, legal, technical or eco- the Group, or those which could pose a threat to its going-
61 Comments on Financial Statements nomic conditions. Identified opportunities and risks are concern status. With regard to the structure of the risk
of BMW AG
64 Events after the End of the addressed in the Outlook Report if they are likely to management system, the responsibility for risk reporting
Reporting Period
materialise. The following sections focus on potential lies with each individual member of staff and manager –
Opportunities future developments or events, which could result in a in their various roles – and not with that of any central-
65 Outlook
positive variance (opportunities) or a negative variance ised unit in particular. Each and every employee and
82 Internal Control System and Risk (risks) in the BMW Group’s outlook. The potential im- manager is required to report risks via the available re-
pact of risks and opportunities is always presented sepa- porting channels. This requirement is set out in guide-
rocess
83 Disclosures Relevant for Takeovers rately and without offset. lines that apply throughout the Group.
Risks and opportunities are assessed as a general rule The Group risk management system comprises a de-
over a medium-term period of two years. All potential centralised network covering all parts of the business,
risks of losses (individual and accumulated risks) are which is steered by a centralised risk management func-
monitored and managed from a risk management per- tion. Each of the BMW Group’s areas of responsibility
spective. As a matter of principle, risks that pose a going- is represented within the risk management network by
concern threat are avoided. If there is no specific so-called network representatives. The network’s for-
reference to a segment, opportunities and risks relate mal organisational structure helps to strengthen its
to the Automotive segment. visibility and underline the importance attached to risk
Risk management in the BMW Group
Group-wide risk management
Identification
Effectiveness
Reporting Analysis and

Measurement Supervisory Board
Compliance
Risk management
Usefulness Risk Management
Committee Steering Committee
Board of Management
Completeness
Monitoring Controlling
Group Audit
Internal Control System

management within the BMW Group. The duties, re- As a supplement to comprehensive risk management,
sponsibilities, and tasks of the centralised risk manage- managing the business on a sustainable basis also repre-
ment unit and network representatives are clearly sents one of the Group’s core corporate principles. Any
described, documented and acted on. Group risk manage- risks or opportunities related to sustainability issues
ment is geared towards meeting the following three are discussed by the Sustainability Committee. Strategic
criteria: effectiveness, usefulness and completeness. In options and measures open to the BMW Group are put
view of the dynamic growth of business in recent years, forward to the Sustainability Board, to which all mem-
in-house thresholds and rules in place for risk reporting bers of the Board of Management belong. Risk aspects
purposes were reviewed in 2014 for effectiveness and discussed at this level are integrated in the work of the
usefulness and modified as seen appropriate. In addition, group-wide risk network. The composition of the Risk
the design of the BMW Group’s risk management net- Management Steering Committee on the one hand and
work was reviewed on the basis of the framework of the the Sustainability Committee on the other ensures that
internationally recognised Committee of Sponsoring risk and sustainability management are closely coordi-
Organizations of the Treadway Commission (COSO). This nated.
review was carried out in conjunction with the Com-
pliance Committee, Group Internal Audit, Internal Risk measurement
Control System and overall Group risk management In order to determine which risks can be considered
functions. Appropriate measures are in place to ensure significant in relation to results of operations, financial
that these functions are coordinated seamlessly. position and net assets and to identify changes in key
performance indicators used by the BMW Group, risks
Risk management process are classified as high, medium or low.
The risk management process is applied throughout
the Group and comprises the early identification and The overall impact on results of operations based on the
penetration of risks, comprehensive analysis and risk assumption that the risk will materialise is measured
measurement, the coordinated use of suitable manage- for the two-year assessment period and allocated to the
ment tools and also the monitoring and evaluation of following categories:
measures taken.
Risks reported to the centralised risk management team Class Earnings impact
from within the network are firstly presented for review

to the Risk Management Steering Committee, for which Low > €0 – 500 million
Group Controlling is responsible. After review, the risks Medium > €500 – 2,000 million
are reported to the Board of Management and to the High > €2,000 million
Supervisory Board. Significant and going-concern-

related risks are classified on the basis of the potential
scale of impact on the Group’s results of operations, The significance of risks for the BMW Group is deter-
financial position and net assets. The level of risk is quan- mined on the basis of risk amounts. The measure-
tified, taking into account the probability of occurrence ment of the amount of a risk takes account of both its
and risk mitigation measures. impact (net of appropriate countermeasures) and the
likelihood of occurrence in each case. The amount of
The risk management system is tested regularly by a risk is approximated in the case of risks measured on
Internal Audit. By sharing experiences with other com- the basis of value-at-risk / cash-flow-at-risk models. In
panies on an ongoing basis, the BMW Group ensures this situation, the following assessment criteria are ap-
that new insights are incorporated in the risk manage- plied:
ment system, thus ensuring continual improvement.
Regular basic and further training as well as information Class Risk amount
events held throughout the BMW Group, and in par-
ticular within the risk management network, are invalu- Low > €0 – 50 million
able ways of preparing people for new or additional Medium > €50 – 400 million
challenges with regard to the processes in which they High > €400 million
are involved.
72
Opportunities management system and identification Risks and opportunities Risk Change
of opportunities amount compared to
prior year
New opportunities regularly present themselves in the
dynamic business environment in which the BMW Group
Political and global economic risks
18 General Information on the BMW Group operates. General economic trends and sector-specific
and opportunities High Stable
18 Business Model
factors – including external regulations, suppliers, cus-
20 Management System Strategic and sector risks and
23 Report on Economic Position tomers and competitors – are monitored continuously. opportunities Medium Increased
Identifying opportunities is an integral part of the pro-
Environment Risks and opportunities relating
26 Overall Assessment by Management cess of developing strategies and drawing up forecasts for to operations
Performance Indicators the BMW Group. Production and technology Medium Stable
29 Review of Operations Purchasing High Stable
Position and Net Assets Market, competition and scenario analyses are conducted Sales and marketing High Stable
61 Comments on Financial Statements and evaluated and forecasts are drawn up as part of Pension obligations High Stable
of BMW AG
64 Events after the End of the the process of identifying opportunities. The Group’s Information, data protection and IT Medium Stable
Reporting Period
product and service portfolio is permanently reviewed Financial risks and opportunities
Opportunities in the light of these analyses and, as appropriate, new Foreign currencies High Stable
65 Outlook
product projects are presented to the Board of Manage- Raw materials High Stable
82 Internal Control System and Risk ment for consideration. Liquidity Low Stable
Risks and opportunities relating
rocess
to the provision of financial services
83 Disclosures Relevant for Takeovers The continuous optimisation of important business
and Explanatory Comments Credit risk High Stable
87 BMW Stock and Capital Markets processes and strict cost control are essential to ensure
Residual value High Stable
good profitability and a high return on capital em-
Interest rate changes Medium Stable
ployed. The forecast is drawn up on the assumption that
Liquidity / operational risks Medium Stable
profitability improvement measures will be imple-
Legal risks Low Stable
mented. One example is the implementation of modu-
lar-based production and common architectures, which
enable a greater commonality of features between
different models and product lines. This, in turn, con- Risks and opportunities which could, from today’s per-
tributes to improved profitability by reducing develop- spective, have a significant impact on the results of
ment costs and investment on the series d evelopment operations, financial position and / or net assets of the
of new vehicles. The new approach has a positive im- BMW Group are described in the following sections.
pact on production costs and helps increase production
flexibility. A more competitive cost basis opens up oppor- Political and global economic risks and
tunities to engage in new market segments. opportunities
As one of the world’s leading providers of premium
The implementation of identified opportunities is un- products and services, the BMW Group faces a variety
dertaken on a decentralised basis. The significance of of major challenges. The world is changing at great
opportunities for the BMW Group is classified in the speed. Resulting situations can give rise to risks on the
categories “material” or “not material”. one hand and opportunities on the other.
Risks and opportunities Political and global economic risks

The following table provides an overview of all risks and Individual mobility remains a key issue in a great many
opportunities and shows their significance for the BMW countries, in terms of political regulation and national
Group. industrial policymaking. Changing values in society are
constantly calling for new solutions in the field of mo-
Neither at the balance sheet date nor at the date on which bility. Unpredictable disturbances in economic interde-
the Group Financial Statements were authorised for pendencies, together with ever-greater competition,
issue were any risks identified which could pose a may give rise to knock-on reactions that are practically
threat to the going-concern status of the BMW Group. impossible to measure.
The current high level of volatility prevailing in many result in an improved quality of earnings. Changes in
economies continues to have an unsettling impact on the legal environment are monitored continuously at a
markets and consumers. Many emerging economies are centralised level. At present, however, the BMW Group
currently performing below their full potential. The does not see any significant political and / or global eco-
eurozone is still having to cope with a range of structural nomic opportunities, which could have a positive sus-
problems, such as those evident in Greece. tainable impact on its earnings performance.
The slowing of economic growth in China, one of the Strategic and sector risks and opportunities
BMW Group’s principal markets, also continues to pose New regulations and the development of fuel and energy
a major risk. Upheavals in the property or banking sector prices also influence various aspects of our business,
in this region could result in reduced demand for our including customer behaviour. Medium- and long-term
products and services. targets have already been put in place in Europe, North
America, Japan, China and other countries to minimise
Any escalation of political conflicts (such as in Russia), fuel consumption and CO2 emissions.
terrorist activities, natural disasters or possible pan-
demics could have a negative impact on the world econ- Strategic and sector risks
omy and international capital markets. The BMW Group One of the main risks for the automobile industry is
counters these risks primarily by internationalising its the possible threat of short-term tightening of laws and
sales and production structures, in order to reduce the regulations, including local registration restrictions. In
potential impact of risk exposures in individual coun- some cases, changes in customer behaviour are not only
tries. Political and global economic risks are determined brought on by new regulations, but also through changes
by analysing historical data and applying a cash-flow-at- of opinion, values and environmental issues. Among
risk approach. other factors, global climate change is having an effect
on legislation, regulations and consumer behaviour. In
If risks from this category were to materialise, they order to meet structural changes in the demand for
could – due to sales volume fluctuations – have a high individual mobility that no longer necessarily entail
impact on results of operations over the two-year as- actually owning a vehicle, the BMW Group is offering
sessment period. Overall, the risk amounts attached corresponding mobility services, such as the DriveNow
to political and global economic risks are classified as car-sharing model.
high.
With its Efficient Dynamics concept, the BMW Group
Political and global economic opportunities is playing a pioneering role in the premium segment in
Despite the high level of risk involved, the BMW Group reducing both fuel consumption and emissions. With
sees an opportunity for above-average growth in the effect from 2013, our range of products was expanded
Chinese market. In addition to the impact from eco- to include electric powertrains in BMW i series vehicles.
nomic developments, the BMW Group’s earnings can These innovations also make an important contribution
also be positively affected in the short to medium term in our endeavours to fulfil statutory rules and require-
by changes in the legal environment. A possible reduc- ments in terms of CO2 emissions. The BMW Group is
tion in tariff barriers, import restrictions or direct ex- investing in the development of sustainable drive tech-
cise duties could lower the cost of materials for the nologies and materials, with the aim of providing highly
BMW Group, also enabling products and services to be efficient vehicles for individual mobility in the premium
offered to customers at lower prices. Another factor to segment, both now and in the future.
consider is that regulatory support for forward-looking
technologies, such as electromobility, help to make Employees make a vital contribution to sustainable
the total cost of ownership more attractive for customers growth and improved profitability through their inno-
in the form of incentives. Developments of this kind vative skills. One prerequisite for this is a consistent
open up opportunities to achieve faster market penetra- strategic approach to the management of human re-
tion for these technologies, which could, in turn, lead sources, even in the event of changes in the legal frame-
to higher sales volumes and, all other things being equal, work. The BMW Group has appropriate measures in
74
place for such eventualities. Risk amounts and earnings The BMW Group is constantly refining the tools it uses
impact are measured on the basis of extensive scenario to recruit employees, encourage career development and
analyses. bind employees to the enterprise. Within this environ-
ment, employees find the optimal situation in which to
18 General Information on the BMW Group If risks from the strategic and sector category were to develop their skills. If these measures generate greater
18 Business Model
materialise, they could have a medium impact on results benefits than currently expected, the BMW Group’s rev-
23 Report on Economic Position of operations over the two-year assessment period. The enues, results of operations and cash flows could be
amounts of risk attached to strategic and sector-specific positively impacted and forecasted figures surpassed.
Environment
26 Overall Assessment by Management risks are classified as medium. Creating a successful performance culture and the devel-
Performance Indicators opment of the expertise and skill sets of both staff and
29 Review of Operations Strategic and sector opportunities managers alike throughout the organisation could also
Position and Net Assets Additions to the product and mobility portfolio and have a positive impact on revenue and profitability.
61 Comments on Financial Statements expansion in growth regions are seen as the most im-
of BMW AG
64 Events after the End of the portant opportunities for growth in the medium to Given the long lead times involved, the BMW Group’s
Reporting Period
long term for the BMW Group. earnings performance is unlikely to benefit over the as-
Opportunities sessment period from efficiency improvements or from
65 Outlook
Remaining on growth course depends above all else on the implementation of product and process developments
82 Internal Control System and Risk the ability to develop innovative products and bring to a significantly greater extent than that already incor-
them to market. The launching of the BMW i brand opens porated in the outlook.
rocess
83 Disclosures Relevant for Takeovers up new customer target groups for the BMW Group and
87 BMW Stock and Capital Markets consolidates the position of BMW as a sustainable and Risks and opportunities relating to operations
forward-looking brand. BMW i products can be seen as Production and technology-related risks
“empowerment projects” for new technologies and pro- Production stoppages and downtimes – in particular
cesses, which will also benefit other vehicle concepts. due to fire, but also those attributable to manufacturing
The existing product portfolio has been expanded by the equipment breakdowns, logistical disruptions or new
addition of mobility services such as DriveNow, Charge- vehicle production line start-ups – represent risks which
Now and ParkNow. The general acceptance of, and the BMW Group counters with a broad range of appro-
sales volumes generated with, planned future product priate measures. Production structures and processes
innovations could be better than predicted in the out- are designed from the outset with a view to reducing
look. In the short term, however, any potential positive potential damage and the probability of occurrence. In
impact is classified as not material. addition to technical fire protection measures, the BMW
Group has implemented an array of strategies, including
The long-term trend towards greater sustainability pro- preventative maintenance, land development measures
vides opportunities to boost sales of sustainable prod- including contingencies against flooding, spare parts
ucts and, under the right circumstances, achieve better management on a multi-site basis and backup plans
selling prices. Innovations – such as the BMW i3 and i8 for alternative transportation. The level of risk is also
in the field of electromobility or Efficient Dynamics reduced by the deployment of flexible work-schedule
across the entire BMW Group product portfolio – pro- models and employee time accounts, but also by the
vide excellent platforms for future growth. Potential ability to build specific models at additional sites if
is also seen by engaging in new product and market necessary. Moreover, risks arising from business inter-
categories and by developing new customer target ruption and loss of production as a consequence of fire
groups. New business models and cooperation arrange- are also insured up to economically reasonable levels
ments with the BMW Group’s growing network of with insurance companies of good credit standing.
business partners often provide the best means to take
advantage of these opportunities. Good examples of If risks from the production and technology-related risks
this are the implementation of the 360°ELECTRIC port- category were to materialise, they could have a high im-
folio in the field of electromobility, the partnership with pact on the results of operations over the two-year as-
SIXT in the field of mobility services and collaboration sessment period. The level of risk attached to prouction
with Toyota on a hydrogen fuel cell system. and technology-related issues is classified as m
edium.
Production and technology-related opportunities parts. In order to attain the level of quality required, it
In addition to the risks involved, we firmly believe that may become necessary to invest in new technological
the choice of sites for new production facilities also concepts or discontinue planned innovations, with the
creates a wealth of opportunities. Selecting a new loca- consequence that the cost of materials could exceed
tion goes hand in glove with the opportunity to shape levels incorporated in the outlook. Supplier sites are as-
the local environment in a positive way (e. g. job crea- sessed for exposure to natural hazards, such as floods
tion, training, corporate social responsibility (CSR) pro- or earthquakes, in order to identify supply risks at an
jects). Our aim is to continue our commitment to sus- early stage and implement appropriate countermeasures.
tainability whenever a new site is selected. We therefore Production problems incurred by suppliers could have
endeavour to incorporate flagship projects at our pro- adverse consequences for the BMW Group, ranging
duction sites that have a clear focus on sustainability from increased expenditure through to production in-
(e. g. wind turbines in Leipzig). The option of offsetting terruptions and a corresponding reduction in sales
capacities between BMW Group sites is always kept in volume.
mind if production technologies can be employed to
achieve greater efficiency in the use of resources. Raw materials management procedures are in place to
mitigate the risk of a production interruption due to
Compared to the outlook, efficiency improvements are shortages of supplies of critical raw materials. In order
unlikely to have a significantly greater impact over to reduce supply risks, the BMW Group works hard
the two-year assessment period than that already incor- to reduce the input of raw materials or to use alternative
porated in the outlook. raw materials as a substitute.
Purchasing risks If purchasing risks were to materialise, they could have

Close cooperation between carmakers and automotive a high impact on the BMW Group’s results of opera-
suppliers creates economic benefits on the one hand, tions over the two-year assessment period. The level
but also raises levels of dependency on the other. The of risk attached to supply risks is classified as high,
increasing trend towards modular-based production mainly due to the insufficient availability of raw materials
with a set of common architectures covering various in Asia.
models and product lines exacerbates the consequences
of the loss of a supplier or failure to supply on time. Risks relating to sales and marketing
As part of the supplier preselection process, the BMW Changes in global economic conditions and increasingly
Group is careful to ensure that its future business part- protectionist trends are among the factors that could
ners meet the same high ecological, social and corpo- result in lower demand as well as fluctuations in the re-
rate governance standards by which the BMW Group is gional spread and composition of sales in terms of vehi-
generally measured. Suppliers are assessed on the basis cles and mobility services. Risks relating to these
of the BMW Group Sustainability Standard, which is developments can be reduced with the aid of flexible
applied throughout our supplier network worldwide. selling and production processes. At the same time, in-
This set of fundamental principles and standards covers creased pressure on selling prices and margins caused
both production and non-production aspects relevant by intense competition on the world’s markets, particu-
for the goods and services provided by suppliers, which larly in Western Europe, the USA and China, requires
also includes compliance with internationally recognised constant analysis, including keeping an eye on develop-
human rights and applicable labour and social stand- ments in grey market volumes from the USA to China.
ards. The principal tool for ensuring compliance with Selling price and margin risks are determined on the
the BMW Group Sustainability Standard is a three- basis of past experience and changing global economic
stage sustainability and risk management approach com- conditions, with risk exposures measured using a cash-
prising a BMW Group-specific sustainability risk filter, flow-at-risk model.
a sustainability questionnaire and a sustainability audit.
In addition, the technical and financial capabilities of If sales and marketing risks were to materialise, they
suppliers – especially those supplying for modular-based could have a high impact on the BMW Group’s results
production – are continuously monitored during both of operations over the two-year assessment period. The
the development and production phases of the Group’s level of risk attached to sales and marketing risks is
vehicles. Particular attention is paid to the quality of the classified as high.
76
Opportunities relating to sales and marketing The BMW Group considers that these opportunities will
Opportunities may arise due to other technical innova- not have a material impact on the results of operations
tions relating to products and processes and as a result over the two-year assessment period compared to the
of organisational changes. In the field of lightweight assumptions made in the outlook.
18 General Information on the BMW Group construction, for example, carbon was being put to use
18 Business Model
in high volumes for the first time in the automobile in- Risks relating to pension obligations
23 Report on Economic Position dustry in the construction of the BMW i3. The BMW Group’s pension obligations to its employees
resulting from defined benefit plans are measured on
Environment
26 Overall Assessment by Management Since carbon could also be used in other vehicle projects, the basis of actuarial reports. Future pension payments
Performance Indicators we see further competitive advantages in terms of fuel are discounted by reference to market yields on high-
29 Review of Operations consumption and driving dynamics, which could, in quality corporate bonds. These yields are subject to mar-
Position and Net Assets turn, have a positive impact on sales volume growth. The ket fluctuation and therefore influence the level of pen-
61 Comments on Financial Statements opportunities will not have a material impact over the sion obligations. Changes in other parameters, such as
of BMW AG
64 Events after the End of the assessment period on the results of operations of the rises in inflation and longer life expectancy, also impact
Reporting Period
BMW Group. pension obligations and payments. Opportunities and
Opportunities risks arise depending on the nature and scale of changes
65 Outlook
The BMW Group focuses its selling capacities primarily in these parameters.
82 Internal Control System and Risk on markets with the greatest sales volume and revenue
potential and fastest growth rates. Investment in existing Most of the BMW Group’s pension obligations are ad-
rocess
83 Disclosures Relevant for Takeovers and new marketing concepts is firmly aimed at inten ministered in external pension funds or trust arrange-
87 BMW Stock and Capital Markets sifying relationships with customers. A good example is ments and the related assets are kept separate from Com-
the new marketing concept for BMW i products and pany assets. The amount of funds required to finance
services, which will be offered in selected markets in the pension payments out of operations in the future is
future via an innovative multi-channel model. There therefore substantially reduced, since most of the Group’s
will be no relaxing of efforts in the active search for new pension obligations are settled out of pension fund as-
opportunities to create even greater added value for sets. The pension assets of the BMW Group comprise
customers than currently expected, whilst at the same interest-bearing securities, equities, real estate and other
time looking for ways to boost sales volumes and achieve investment classes. Pension fund assets are monitored
better selling prices. Developments in the field of digi- continuously and managed on a risk-and-yield basis.
tal communication and networking are also opening A broad spread of investments also helps to reduce risk.
up opportunities for marketing the BMW Group’s In order to reduce fluctuations in pension funding
various brands. Consumers can meanwhile be reached shortfalls, investments are structured to coincide with
on a more targeted and individual basis, thus helping to the timing of pension payments and the expected pat-
strengthen long-term relationships and brand loyalty. tern of pension obligations. Remeasurements on the
The BMW Group keeps track of the latest developments obligations and fund asset sides are recognised, net of
and trends in communication technology, including deferred taxes, in “Other comprehensive income” and
the use of social media and networks, in order to extend hence directly in equity (within revenue reserves).
customer reach for its brands. Automotive-related busi-
ness activities of technology companies are also closely If risks relating to pension obligations were to mate
followed (autonomous driving). The BMW Group’s rialise, they could have a high impact on the BMW
brands are present on numerous platforms, such as Group’s results of operations over the two-year assess-
Facebook, YouTube and Twitter. Thanks to its intensive ment period. The level of risk attached to risks r elating
efforts in this area, the BMW Group is registering faster to pension obligations is classified as high.
growth rates on the various platforms than its com
petitors, measured in terms of the number of fans and Opportunities relating to pension obligations
visits. The decisive advantage of digital communication Within a favourable capital market environment, the
is that the brands are able to engage in a direct dia- return generated by pension assets may exceed expec-
logue with customers and thus create a more intense tations and reduce the deficit of the relevant pension
product and brand experience. plans. This, in turn, could have a materially favourable
impact on the net assets position and earnings perfor- cluding the testing of data protection requirements) and
mance of the BMW Group. rigorous security management ensure a high level of
security.
Further information on risks in conjunction with pen-
sion provisions is provided in note 36 to the Group Responsibility for data protection in each Group entity
Financial Statements. lies with the Board of Management (of BMW AG) or
the relevant company management team. Local Data
Information, data protection and IT risks Privacy Protection Officers are embedded in each of the
The importance of electronically processed data con- Group’s entities. In the case of cooperation arrange-
tinues to rise, with information technology (IT) playing ments and business partner relationships, the BMW
an increasingly crucial role in every aspect of the Group protects its intellectual property as well as cus-
business. These developments create opportunities on tomer and employee data by stipulating clear instruc-
the one hand, whilst also posing a source of risk on the tions with regard to data protection and the use of
other. information technology. Information pertaining to key
areas of expertise as well as sensitive personal data
The BMW Group could incur damage if the confiden are subject to particularly stringent security measures.
tiality, integrity and / or availability of sensitive informa- In a clear signal to employees, customers and Europe’s
tion and data are not maintained. Great importance is data protection authorities that data protection is taken
attached to the protection of business information and very seriously, the Board of Management of BMW AG
of employee and customer data against unauthorised resolved a set of Binding Corporate Rules (BCR) that
access and / or misuse. Data security, based on Interna- ensure the secure transfer of personal data throughout
tional Security Standard ISO / IEC 27001, is an integral the BMW Group’s global organisation. The BMW Group
component of all business processes. Personal data is has become the first car manufacturer worldwide to
protected in accordance with the stringent requirements successfully complete the relevant BCR recognition pro-
of the EU Data Protection Directive and the Federal cedures.
Data Protection Act (Bundesdatenschutzgesetz – BDSG).
The requirements placed on IT facilities – both externally
All employees are required to treat confidential infor- and internally – are changing at a breathtaking pace in
mation (such as customer and employee data) in an ap- the face of technological developments. Potential risks
propriate manner, ensure that information systems are are therefore investigated continuously and appropriate
properly used and that risks are handled with the ut- measures put in place to prevent or minimise their im-
most transparency. Uniform requirements, documented pact. Despite regular testing and the whole gamut of
in a coordinated and comprehensive set of principles, preventative security measures employed, it is neverthe-
guidelines and work instructions, are applicable group- less impossible to rule out risks completely in this area.
wide. Regular communication and sensitisation-rais-
ing activities create a high degree of security and risk If information, data protection and IT risks were to ma-
awareness among the employees involved. Employees terialise, they are only likely to result in a minor impact
receive training to ensure compliance with applicable on the results of operations over the two-year assess-
requirements and in-house rules. ment period. The levels of risk attached to information,
data protection and IT risks are classified as medium.
Risk management procedures include systematic docu-
mentation of all information / data protection and IT Information, data protection and IT opportunities
risks, regular monitoring and the implementation of Conversely, the deployment of information technology
appropriate measures by the departments responsible. also opens up many opportunities. New approaches
Technical data protection procedures include virus scan- to production and energy supply systems that are cur-
ners, firewall systems, access controls at both operating rently being investigated in the context of “Industrie
system and application level, regular data backups and 4.0” are generating significant efficiency improvements
data encryption. Regular analyses and controls (in- and resulting in greater sustainability. The range of
78
services and apps on offer to customers through BMW over the two-year assessment period. A high level of
ConnectedDrive is constantly being expanded and up- risk is attached to currency risks. Significant opportuni-
dated. ties can arise if currency developments are favourable
for the BMW Group.
18 General Information on the BMW Group The opportunities arising from the deployment of infor-
18 Business Model
mation technology are not expected to have a material If the relevant recognition criteria are fulfilled, deriva-
23 Report on Economic Position positive impact during the two-year assessment period tives used by the BMW Group are accounted for as
compared to the assumptions made in the outlook. hedging relationships. Further information on risks in
Environment
26 Overall Assessment by Management conjunction with financial instruments is provided in
Performance Indicators Financial risks and opportunities note 43 to the Group Financial Statements.
29 Review of Operations Currency risks and opportunities
Position and Net Assets As an internationally operating enterprise, the BMW Risks and opportunities relating to raw materials
61 Comments on Financial Statements Group conducts business in a variety of currencies, thus Changes in prices of raw materials are monitored on the
of BMW AG
64 Events after the End of the giving rise to currency risks and opportunities. Since a basis of a set of well-defined management procedures.
Reporting Period
substantial portion of Group revenues is generated out- The principal objective of these management processes
Opportunities side the eurozone (particularly in China and the USA) is to increase planning reliability for the BMW Group.
65 Outlook
and the procurement of production material and funding
82 Internal Control System and Risk is also organised on a worldwide basis, fluctuations in Price risks and opportunities relating to precious metals
exchange rates can play a significant role for Group (platinum, palladium, rhodium) and non-ferrous metals
rocess
83 Disclosures Relevant for Takeovers earnings. Cash-flow-at-risk models and scenario analyses (aluminium, copper, lead), and, to some extent, to steel
87 BMW Stock and Capital Markets are used to measure currency risks and opportunities. and steel ingredients (iron ore, coking coal) and energy
Operational currency management is based on the results (gas, electricity) are hedged using financial derivatives
provided by these tools. In 2014 the Chinese renminbi, and / or supply contracts with fixed pricing arrangements.
the US dollar, the British pound, the Russian rouble and A description of the methods applied for risk measure-
the Japanese yen constituted approximately 75 % of the ment and hedging is provided in note 43 to the Group
total foreign currency exposure of the BMW Group, with Financial Statements.
the Chinese renminbi and the US dollar accounting for
the lion’s share of foreign currency transactions. The If risks relating to raw materials were to materialise,
BMW Group manages currency risks at both strategic they could have a medium impact on the BMW Group’s
(medium and long term) and operating level (short results of operations over the two-year assessment
and medium term). Medium- and long-term measures period. A high level of risk is attached to risks relating
include increasing production volumes in non-euro- to raw materials.
region countries (natural hedging) and increasing pur-
chase volumes denominated in foreign currencies. Conversely, significant opportunities can arise if prices
Constructing new plants in countries such as the USA, of raw materials develop favourably for the BMW Group.
China or Brazil have also helped reduce foreign cur-
rency exposures. Currency risks are managed in the If the relevant recognition criteria are fulfilled, deriva-
short to medium term and for operational purposes by tives used by the BMW Group are accounted for as
means of hedging. Hedging transactions are entered hedging relationships. Further information on risks in
into only with financial partners of good credit standing. conjunction with financial instruments is provided in
Opportunities are also secured through the deployment note 43 to the Group Financial Statements.
of options. A description of the methods applied for
risk measurement and hedging is provided in note 43 Liquidity risks
to the Group Financial Statements. Counterparty risk Based on experience gained during the financial crisis,
management procedures are carried out continuously a minimum liquidity concept has been developed and
in order to monitor the creditworthiness of business is rigorously adhered to. Solvency is assured at all times
partners. throughout the BMW Group by maintaining a liquidity
reserve and by the broad diversification of refinancing
If currency risks were to materialise, they could have a sources. The liquidity position is monitored continu-
high impact on the BMW Group’s results of operations ously at a separate entity level and managed by means
of cash flow requirements and sourcing forecast sys- must be covered at all times by an appropriate asset
tem in place throughout the Group. Liquidity risks may cushion in the form of equity capital. Unexpected losses
be reflected in rising refinancing costs. They may also are measured using a variety of value-at-risk techniques,
manifest themselves in restricted access to funds as a adapted to each relevant risk category. Risks are aggre-
consequence of the general market situation or the de- gated after taking account of correlation effects. The
fault of individual banks. The major part of the Finan- total amount of risks calculated in this way is then com-
cial Services segment’s credit financing and lease busi- pared with the resources available to cover risks (asset
ness is refinanced on capital markets. Thanks to its cushion). The segment’s risk-bearing capacity is moni-
excellent creditworthiness, the BMW Group has good tored continuously with the aid of an integrated limit
access to financial markets and, as in previous years, system which also differentiates between the various risk
was able to raise funds at good conditions in 2014, re- categories. The segment’s total risk exposure was
flecting a diversified refinancing strategy and the solid covered at all times during the past year by the available
liquidity and earnings base of the BMW Group. Inter risk-coverage volumes.
nationally recognised rating agencies have additionally
confirmed the BMW Group’s solid creditworthiness. Credit and counterparty risks and opportunities
Credit and counterparty default risk arises within the
If liquidity risks were to materialise, they are only likely Financial Services segment if a contractual partner (i. e.
to result in a low impact on the BMW Group’s results a customer or dealer) either becomes unable or is only
of operations over the two-year assessment period. partially able to fulfil its contractual obligations, such
The risk of incurring liquidity risk is classified as low – that lower income is generated or losses incurred. The
including the risk of the BMW Group’s rating being Financial Services segment uses a variety of rating
downgraded and any ensuing deterioration in financing systems in order to assess the creditworthiness of its
conditions. contractual partners. Credit risks are managed at the
time of the initial credit decision on the basis of a calcu-
If the relevant recognition criteria are fulfilled, deriva- lation of the present value of standard risk costs and
tives used by the BMW Group are accounted for as subsequently, during the term of the credit, by using a
hedging relationships. Further information on risks in range of risk provisioning techniques to cover risks
conjunction with financial instruments is provided in emanating from changes in customer creditworthiness.
note 43 to the Group Financial Statements. In this context, individual customers are classified by
category each month on the basis of their current con-
Risks and opportunities relating to Financial Services tractual status, and appropriate levels of allowance
The categories of risk relating to the provision of finan- recognised in accordance with that classification. If
cial services are credit and counterparty risk, residual economies develop more favourably than assumed in
value risk, interest rate risk, liquidity risk and opera- the outlook, there is a chance that credit losses may be
tional risk. In order to evaluate and manage these risks, reduced and earnings improved accordingly.
a variety of internal methods has been developed
based on regulatory environment requirements (such If credit and counterparty risks were to materialise, they
as Basel III) and which comply with both national and could have a medium impact on the BMW Group’s
international standards. A set of strategic principles results of operations over the two-year assessment pe-
and rules derived from regulatory requirements serves riod. The level of risk attached to credit and counter-
as the basis for risk management within the Financial party risks is classified as high. The BMW Group classi-
Services segment. At the heart of the risk management fies potential opportunities in this area as material.
process is a clear division between front- and back-of-
fice activities and a comprehensive internal control sys- Residual value risks and opportunities
tem. The key risk management tool employed within Risks and opportunities arise at the end of the contrac-
the Financial Services segment is aimed at ensuring tual term of a lease if the market value of the leased vehi-
that the Group’s risk-bearing capacity is not exceeded. cle differs from the residual value calculated at the in-
In this context, all risks (defined as “unexpected losses”) ception of the lease and factored into the lease payments.
80
A residual value risk exists if the expected market value the inappropriateness or failure of internal procedures
of the vehicle at the end of the contractual term is lower (process risks), people (personnel-related risks), systems
than its residual value at the date the contract is entered (infrastructure and IT risks) and external events (exter-
into. Each vehicle’s market value is forecast on the basis nal risks). These four categories of risk also include re-
18 General Information on the BMW Group of historical external and internal data and used to pre- lated legal and reputation risks. The comprehensive re-
18 Business Model
dict the expected market value of the vehicle at the end cording and measurement of risk scenarios, loss events
23 Report on Economic Position of the contractual period. As part of the process of and countermeasures in the Operational Risk Manage-
managing residual value risks, a calculation is performed ment Suite (OpRisk-Suite) provides the basis for a system-
Environment
26 Overall Assessment by Management at the inception of each contract to determine the pre- atic analysis and management of potential and / or actual
Performance Indicators sent value of risk costs. Market developments are ob- operational risks. Annual self-assessments are also car-
29 Review of Operations served throughout the contractual period and the risk ried out.
Position and Net Assets assessment updated appropriately.
61 Comments on Financial Statements If operational risks were to materialise, they are only
of BMW AG
64 Events after the End of the If residual value risks were to materialise, they could have likely to result in a low impact on the BMW Group’s
Reporting Period
a high impact on Group earnings over the two-year results of operations over the two-year assessment
Opportunities assessment period. The impact on the segments affected period. The level of risk attached to operational risks
65 Outlook
would be on a medium scale. The level of risk is classi- is classified as medium.
82 Internal Control System and Risk fied as high for the Group as a whole. The BMW Group
classifies potential residual value opportunities as
rocess Legal risks
83 Disclosures Relevant for Takeovers material. Compliance with the law is a basic prerequisite for the
87 BMW Stock and Capital Markets success of the BMW Group. Current law provides the
Interest rate risks and opportunities binding framework for the BMW Group’s various busi-
Interest rate risks in the Financial Services segment relate ness activities around the world. The growing interna-
to potential losses caused by changes in market interest tional scale of operations of the BMW Group, the com-
rates and can arise when fixed interest rate periods for plexity of the business world and the whole gamut of
assets and liabilities recognised in the balance sheet do complex legal regulations increase the risk of laws not
not match. Interest rate risks in the Financial Services being adhered to, simply because they are not known or
line of business are managed by raising refinancing funds fully understood.
with matching maturities and by employing interest rate
derivatives. The BMW Group has established a Compliance Organi-
sation aimed at ensuring that its representative bodies,
If interest rate risks were to materialise, they are only managers and staff act in a lawful manner at all times.
likely to result in a low impact on the BMW Group’s Further information on the BMW Group’s Compliance
results of operations over the two-year assessment Organisation can be found in the section “Corporate
period. The level of risk attached to interest rate risks Governance”.
is classified as medium.
Like all internationally operating enterprises, the BMW
The BMW Group classifies potential interest rate oppor- Group is confronted with legal disputes relating, in par-
tunities as material. ticular, to warranty claims, product liability, infringe-
ments of protected rights, and proceedings initiated
Liquidity and operational risks by government agencies. Any of these matters could,
Use of the “matched funding principle” to finance the among other outcomes, have an adverse impact on the
Financial Services segment’s operations eliminates Group’s reputation. Such proceedings are typical for
liquidity risks to a large extent. Regular measurement the sector and can arise as a consequence of realigning
and monitoring ensure that cash inflows and outflows product or purchasing strategies to suit changed market
from transactions in varying maturity cycles and curren- conditions. Particularly in the US market, class action
cies offset each other. The relevant procedures are in- lawsuits and product liability risks can have substantial
corporated in the BMW Group’s target liquidity concept. financial consequences and cause damage to the Group’s
Operational risks are defined in the Financial Services public image. The BMW Group recognises appropriate
segment as the risk of losses arising as a consequence of levels of provision for lawsuits. A part of these risks,
particularly regarding the US market, is insured where

this makes business sense. Some risks, however, cannot
be assessed in full or completely defy assessment. It
cannot be ruled out that losses from damages could
arise which are either not covered or not fully covered
by insurance policies or provisions.
The high quality of the Group’s products, which is en-

sured by regular quality audits and ongoing improvement
measures, helps to reduce this risk. In comparison with
competitors, this can give rise to benefits and opportu-
nities for the BMW Group.
If legal risks were to materialise, they are only likely to

have a low impact on the BMW Group’s results of opera-
tions over the two-year assessment period. The level of
risk attached to legal risks is classified as low. This assess-
ment also includes consideration of risks arising from
ongoing court and arbitration proceedings. However, it
cannot be ruled out that new legal risks, as yet uniden-
tified, could materialise which could have a high impact
on the BMW Group’s results of operations and financial
condition.
Overall assessment of the risk and

opportunities situation
The overall risk assessment is based on a consolidated
view of all significant individual risks and opportunities.
In view of the growing level of strategic and sector-spe-
cific risks, the overall risk situation for the BMW Group
has increased marginally compared to the previous year.
In addition to the risk categories described above, it is

possible that unforeseeable events could have an ad-
verse impact on the BMW Group’s results of operations,
financial position and net assets as well as its reputation.
We have created a comprehensive risk management
system that ensures we can master risks. In addition,
the opportunities described above could potentially
help the BMW Group to achieve its targets and fore-
casts.
From today’s perspective, management does not see any

threat to the BMW Group’s going-concern status. As
in the previous year, identified risks are considered to
be manageable, but could – just like opportunities –
have an impact on the BMW Group’s forecasts if they were
to materialise. The BMW Group’s liquidity is stable and
all cash requirements are currently covered by available
funds and accessible credit lines.
82
Internal Control System* and Risk Management System Relevant for the
Consolidated Financial Reporting Process
The internal control system in place throughout the Group level, thus ensuring that legal requirements and
BMW Group is aimed at ensuring the effectiveness of internal guidelines are complied with and that all busi-
operations. It makes an important contribution towards ness transactions are properly executed. Controls are
ensuring compliance with the laws that apply to the also carried out with the aid of IT applications, thus re-
18 General Information on the BMW Group BMW Group as well as providing assurance on the producing the incidence of process risks.
18 Business Model
priety and reliability of internal and external financial
23 Report on Economic Position reporting. The internal control system is therefore a sig- IT authorisations
nificant factor in the management of process risks. The All IT applications used in financial reporting processes
Environment
26 Overall Assessment by Management principal features of the internal control system and the throughout the BMW Group are subject to access restric-
Performance Indicators risk management system, as far as they relate to individ- tions, allowing only authorised persons to gain access
29 Review of Operations ual entity and Group financial reporting processes, are to systems and data in a controlled environment. Access
Position and Net Assets described below. authorisations are allocated on the basis of the nature
61 Comments on Financial Statements of the duties to be performed. In addition, IT processes
of BMW AG
64 Events after the End of the Information and communication are designed and authorisations allocated using the dual
Reporting Period
One component of the internal control system is that of control principle, as a result of which, for instance, re-
Opportunities “Information and Communication”. It ensures that all quests cannot be submitted and approved by the same
65 Outlook
the information needed to achieve the objectives set for person.
82 Internal Control System and Risk the internal control system is made available to those
responsible in an appropriate and timely manner. The
rocess Internal control training for employees
83 Disclosures Relevant for Takeovers requirements relating to the provision of information All employees are appropriately trained to carry out
87 BMW Stock and Capital Markets relevant for financial reporting at the level of BMW AG, their duties and kept informed of any changes in regu-
other consolidated Group entities and the BMW Group lations or processes that affect them. Managers and
are primarily set out in organisational manuals, in guide- staff also have access to detailed best-practice descrip-
lines covering internal and external financial reporting tions relating to risks and controls in the various pro-
issues, in accounting manuals and through training. cesses, thus increasing risk awareness at all levels.
These instructions, which can be accessed at all levels As a consequence, the internal control system can be
via the BMW Group’s intranet system, provide the frame- evaluated regularly and further improved as necessary.
work for ensuring that the relevant rules are applied Employees can, at any time and independently, deepen
consistently throughout the Group. The quality and their understanding of control methods and design
relevance of these instructions are ensured by regular using an information platform that is accessible through-
review as well as by continuous communication between out the entire Group.
the relevant departments.
Evaluating the effectiveness of the internal
Organisational measures control system
All financial reporting processes (including Group finan- Responsibilities for ensuring the effectiveness of the
cial reporting processes) are structured in organisational internal control system in relation to individual entity
terms in accordance with the principle of segregation and Group financial reporting processes are clearly de-
of duties. These structures allow errors to be identified at fined and allocated to the relevant managers and pro-
an early stage and prevent potential wrongdoing. Regu- cess owners. The BMW Group assesses the design and
lar comparison of internal forecasts and external financial effectiveness of the internal control system on the basis
reports improves the quality of financial reporting. The of internal review procedures (e. g. management self-
internal audit department serves as a process-inde- audits, internal audit findings). Continuous revision
pendent function, testing and assessing the effectiveness and further development of the internal control system
of the internal control system and proposing improve- ensure its continued effectiveness. Group entities are
ments when appropriate. required to confirm regularly as part of their reporting
duties that the internal control system is functioning
Controls properly. Effective measures are implemented when-
Extensive controls are carried out by management in all ever weaknesses are identified and reported.
financial reporting processes at an individual entity and *
Disclosures pursuant to § 289 (5) HGB and § 315 (2) no. 5 HGB.
Disclosures Relevant for Takeovers1 and Explanatory Comments
Composition of subscribed capital (a) subsequent payment of any arrears on dividends on

The subscribed capital (share capital) of BMW AG non-voting preferred shares in the order of accrue-
amounted to € 656,494,740 at 31 December 2014 (2013: ment,
€ 656,254,983) and, in accordance with Article 4 no. 1 (b) payment of an additional dividend of € 0.02 per € 1
of the Articles of Incorporation, is sub-divided into par value on non-voting preferred shares and
601,995,196 shares of common stock (91.70 %) (2013: (c) uniform payment of any other dividends on shares
601,995,196; 91.73 %) and 54,499,544 shares of non- on common and preferred stock, provided the
voting preferred stock (8.30 %) (2013: 54,259,787; 8.27 %), shareholders do not resolve otherwise at the Annual
each with a par value of € 1. The Company’s shares General Meeting.
are issued to bearer. The rights and duties of share
holders derive from the German Stock Corporation Restrictions on voting rights or the transfer of shares
Act (AktG) in conjunction with the Company’s Articles As well as shares of common stock, the Company has
of Incorporation, the full text of which is available at also issued non-voting shares of preferred stock. Fur-
www.bmwgroup.com. The right of shareholders to have ther information relating to this can be found above in
their shares evidenced is excluded in accordance with the section “Composition of subscribed capital”.
the Articles of Incorporation. The voting power at-
tached to each share corresponds to its par value. Each When the Company issues non-voting shares of pre-
€ 1 of par value of share capital represented in a vote ferred stock to employees in conjunction with its
entitles the holder to one vote (Article 18 no. 1 of the Employee Share Programme, these shares are subject
Articles of Incorporation). The Company’s shares of pre- as a general rule to a Company-imposed vesting period
ferred stock are shares within the meaning of § 139 et of four years, measured from the beginning of the
seq. AktG, which carry a cumulative preferential right calendar year in which the shares are issued.
in terms of the allocation of profit and for which voting
rights are normally excluded. These shares only confer Contractual holding period arrangements also apply to
voting rights in exceptional cases stipulated by law, in shares of common stock required to be acquired by
particular when the preference amount has not been Board of Management members and certain senior de-
paid or has not been fully paid in one year and the ar- partment heads in conjunction with the share-based
rears are not paid in the subsequent year alongside the remuneration programmes (Compensation Report of
full preference amount due for that year. With the ex- the Corporate Governance section; note 20 to the Group
ception of voting rights, holders of shares of preferred Financial Statements).
stock are entitled to the same rights as holders of shares
of common stock. Article 24 of the Articles of Incorpo- Direct or indirect investments in capital exceeding
ration confers preferential treatment to the non-voting 10 % of voting rights
shares of preferred stock with regard to the appropria- Based on the information available to the Company, the
tion of the Company’s unappropriated profit. Accord- following direct or indirect holdings exceeding 10 % of
ingly, the unappropriated profit is required to be appro- the voting rights at the end of the reporting period were
priated in the following order: held at the date stated2:
1
Disclosures pursuant to § 289 (4) HGB and § 315 (4) HGB.
Direct share of Indirect share of

voting rights (%) voting rights (%)
AQTON SE, Bad Homburg v. d. Höhe, Germany 17.4

Stefan Quandt, Germany 17.4
Johanna Quandt, Germany 0.4 16.4
Johanna Quandt GmbH, Bad Homburg v. d. Höhe, Germany 16.4
Johanna Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe, Germany 16.4
Susanne Klatten, Germany 12.6
Susanne Klatten Beteiligungs GmbH, Bad Homburg v. d. Höhe, Germany 12.6
2 Based on voluntary balance notifications provided by the listed shareholders at 31 December 2014.
84
The voting power percentages disclosed above may have Authorisations given to the Board of Management in
changed subsequent to the stated date if these changes particular with respect to the issuing or buying back of
were not required to be reported to the Company. Due to shares
the fact that the Company’s shares are issued to bearer, The Board of Management is authorised to buy back
18 General Information on the BMW Group the Company is generally only aware of changes in shares and sell repurchased shares in situations specified
18 Business Model
shareholdings if such changes are subject to mandatory in § 71 AktG, e. g. to avert serious and imminent damage
23 Report on Economic Position notification rules. to the Company and / or to offer shares to persons em-
ployed or previously employed by BMW AG or one of its
Environment
26 Overall Assessment by Management Shares with special rights which confer control rights affiliated companies.
Performance Indicators There are no shares with special rights which confer
29 Review of Operations control rights. In accordance with the resolution passed at the Annual
Position and Net Assets General Meeting on 15 May 2014, the Board of Manage-
61 Comments on Financial Statements System of control over voting rights when employees ment is also authorised – up to 14 May 2019 – to acquire
of BMW AG
64 Events after the End of the participate in capital and do not exercise their control shares of non-voting preferred stock of the Company
Reporting Period
rights directly via the stock exchange, up to a maximum of 1 % of the
Opportunities Like all other shareholders, employees exercise their share capital existing at the date of the resolution. The
65 Outlook
control rights pertaining to shares they have acquired consideration paid by the Company per share of non-
82 Internal Control System and Risk in conjunction with the Employee Share Programme voting preferred stock (excluding transaction costs) may
and / or the share-based remuneration programme not be more than 10 % above or below the market price
rocess
83 Disclosures Relevant for Takeovers directly on the basis of relevant legal provisions and the determined by the opening auction on the date of trad-
87 BMW Stock and Capital Markets Company’s Articles of Incorporation. ing of the stock in the XETRA trading system (or a suc-
cessor system having a comparable function). Moreover,
Statutory regulations and Articles of Incorporation the Board of Management is authorised to use the ac-
provisions with regard to the appointment and removal quired Company’s own shares of non-voting preferred
of members of the Board of Management and changes stock for all legally admissible purposes, specifically in-
to the Articles of Incorporation cluding the right to offer and transfer shares to persons
The appointment or removal of members of the Board employed by the Company or one of its affiliated com-
of Management is based on the rules contained in panies up to a proportionate amount of € 5 million of
§ 84 et seq. AktG in conjunction with § 31 of the German share capital. The subscription rights of existing share-
Co-Determination Act (MitbestG). holders to the new shares of preferred stock used for
the purpose stated above are excluded. The authorisa-
Amendments to the Articles of Incorporation must tions may also be exercised in parts on more than one
comply with § 179 et seq. AktG. All amendments must occasion.
be decided upon by the shareholders at the Annual
General Meeting (§ 119 (1) no. 5, § 179 (1) AktG). The In accordance with Article 4 no. 5 of the Articles of
Supervisory Board is authorised to approve amend- Incorporation, the Board of Management is authorised –
ments to the Articles of Incorporation which only affect with the approval of the Supervisory Board – to in-
its wording (Article 14 no. 3 of the Articles of Incorpora- crease BMW AG’s share capital during the period until
tion). Resolutions are passed at the Annual General 14 May 2019 by up to € 4,760,243 for the purposes of an
Meeting by simple majority of shares unless otherwise Employee Share Programme by issuing new non-voting
explicitly required by binding provisions of law or, shares of preferred stock, which carry the same rights
when a majority of share capital is required, by simple as existing non-voting preferred stock, in return for
majority of shares represented in the vote (Article 20 cash contributions (Authorised Capital 2014). Existing
no. 1 of the Articles of Incorporation). shareholders may not subscribe to the new shares. No
conditional capital is in place at the reporting date.
Significant agreements entered into by the Company extraordinary right of termination which triggers the
subject to control change clauses in the event of immediate settlement of all current transactions in
a takeover bid the event that the creditworthiness of the party in-
The BMW AG is party to the following major agreements volved is materially weaker following a direct or indi-
which contain provisions for the event of a change in rect acquisition of beneficially owned equity capital
control or the acquisition of control as a result of a take- which confers the power to elect a majority of the
over bid: Supervisory Board of a contractual party or any other
– An agreement concluded with an international con- ownership interest that enables the acquirer to exer-
sortium of banks relating to a syndicated credit line cise control over a contractual party or which consti-
(which was not being utilised at the balance sheet tutes a merger or a transfer of net assets.
date) entitles the lending banks to give extraordinary – Financing agreements in place with the European
notice to terminate the credit line (such that all out- Investment Bank (EIB) entitle the EIB to request early
standing amounts, including interest, would fall due repayment of the loan in the event of an imminent
immediately) if one or more parties jointly acquire or actual change in control at the level of BMW AG
direct or indirect control of BMW AG. The term “con- (partially in the capacity of guarantor and partially in
trol” is defined as the acquisition of more than 50 % the capacity of borrower), if the EIB has reason to as-
of the share capital of BMW AG, the right to receive sume – after the change of control has taken place or
more than 50 % of the dividend or the right to direct 30 days after it has requested to discuss the situation –
the affairs of the Company or appoint the majority of that the change in control could have a significant
members of the Supervisory Board. adverse impact, or, in all but one case, as an additional
– A cooperation agreement concluded with Peugeot SA alternative, if the borrower refuses to hold such dis-
relating to the joint development and production of cussions. A change in control of BMW AG arises if
a new family of small (1 to 1.6 litre) petrol-driven en- one or more individuals take over or lose control of
gines entitles each of the cooperation partners to give BMW AG, with control being defined in the above-
extraordinary notification of termination in the event mentioned financing agreements as (i) holding or
of a competitor acquiring control over the other con- having control over more than 50 % of the voting
tractual party and if any concerns of the other con- rights, (ii) the right to stipulate the majority of the
tractual party concerning the impact of the change members of the Board of Management or Supervisory
of control on the cooperation arrangements are not Board, (iii) the right to receive more than 50 % of
allayed during the subsequent discussion process. dividends payable, and, in all but one case, as an ad-
– BMW AG acts as guarantor for all obligations arising ditional alternative (iv) other comparable controlling
from the joint venture agreement relating to BMW influence over BMW AG.
Brilliance Automotive Ltd. in China. This agreement – BMW AG is party to an agreement with SGL Carbon
grants an extraordinary right of termination to either SE, Wiesbaden, relating to the joint operations SGL
joint venture partner in the event that, either directly Automotive Carbon Fibers LLC, Delaware, USA and
or indirectly, more than 25 % of the shares of the SGL Automotive Carbon Fibers GmbH & Co. KG,
other party are acquired by a third party or the other Munich. The agreement includes call and put rights
party is merged with another legal entity. The termi- in case – either directly or indirectly – 50 % or more of
nation of the joint venture agreement may result in the voting rights relating to the relevant other share-
the sale of the shares to the other joint venture part- holder of the joint operations are acquired by a third
ner or in the liquidation of the joint venture entity. party, or if 25 % of such voting rights have been ac-
– Framework agreements are in place with financial in- quired by a third party if that third party is a com-
stitutions and banks (ISDA Master Agreements) with petitor of the party that has not been affected by the
respect to trading activities with derivative financial acquisition of the voting rights. In the event of such
instruments. Each of these agreements includes an acquisitions of voting rights by a third party, the non-
86
affected shareholder has the right to purchase the

shares of the joint operations from the affected share-
holder or to require the affected party to acquire the
other shareholder’s shares.
18 General Information on the BMW Group – An engine supply agreement between BMW AG and
18 Business Model
Toyota Motor Europe SA relating to the sale of diesel
23 Report on Economic Position engine entitles each of the contractual parties to give
extraordinary notification of termination in the event
Environment
26 Overall Assessment by Management that one of the contractual parties merges with an-
Performance Indicators other company or is taken over by another company.
Position and Net Assets Compensation agreements with members of the
61 Comments on Financial Statements Board of Management or with employees in the event
of BMW AG
64 Events after the End of the of a takeover bid
Reporting Period
The BMW Group has not concluded any compensation
Opportunities agreements with members of the Board of Management
65 Outlook
or with employees for situations involving a takeover
82 Internal Control System and Risk offer.
rocess
BMW Stock and Capital Markets in 2014
BMW stocks rose to a new all-time high of € 95.51 per Development of BMW stock compared to stock exchange
share of common stock in 2014. The BMW Group indices since 30 December 2009
continues to have the best ratings in the European in %
automobile sector, enabling it to continue benefiting 300
from excellent access to international capital markets. 250
200
Turbulent year for stock markets 150
International stock markets experienced broad fluctua- 100
tions in 2014, attributable primarily to the expansionary 50
monetary policies of the ECB and to political instability
in a number of countries. BMW BMW Prime DAX
preferred stock common stock Automobile
At the beginning of the year, stock markets were bur-
dened by uncertainties surrounding the Ukraine crisis 295.0

282.3 274.4 164.6
and its likely negative economic impact. At the same
time, favourable economic data from Europe, the USA’s

improved employment market and the US Reserve
Bank’s continued policy of monetary expansion pro- new all-time high of 10,087 points on 5 December,
vided some positive momentum. Over the course of before closing on the last day of trading below its high
the second and third quarters, the ECB’s expansionary level for the year at 9,806 points, thus achieving a gain of
monetary policies provided an additional boost. The in- 254 points (+ 2.7 %) over the volatile twelve-month period.
terest rate for the Eurosystem’s main refinancing opera-
tions was reduced by 10 basis points in June to 0.15 % The EURO STOXX 50 recorded a gain of 1.2 % in 2014
and by a further 10 basis points to 0.05 % in September and closed on 31 December at 3,146 points.
and has remained at its new historical low since that
time. A state of nervousness prevailed on the world’s The Prime Automobile Index performed even better,
financial centres during the third quarter 2014. The gaining 7.0 % over the year under report to reach
sharp loss in value of the rouble and the threat of state 1,490 points.
bankruptcy in Ukraine caused the mood of investors
to deteriorate. In October the DAX fell to its low for the After a weak start to the year, BMW common stock sub-
year of 8,572 points. By the end of the year, however, sequently climbed to a new high of € 95.51 in June. After
the more stable situation in the Ukraine crisis brought falling back to a low for the year of € 77.41 in October,
about by agreement in the gas dispute with Russia, it returned to an upward trend in the fourth quarter and
combined with the fall in oil prices, helped markets to finished the year at € 89.77, 5.3 % higher than one year
steady and gather momentum. The DAX recorded a earlier. BMW preferred stock gained 9.3 % in value com-
Development of BMW stock compared to stock exchange indices

325
300 BMW preferred stock

BMW common stock
275 Prime Automobile
250
225
200
175 DAX
150
125
100

10 11 12 13 14

BMW preferred stock BMW common stock Prime Automobile DAX

88
pared to its closing price at the end of the previous year. shares of preferred stock. This increase was executed on
Its price at the end of the stock market year was € 67.84. the basis of Authorised Capital 2014 in Article 4 (5) of
A new all-time high of € 74.60 was recorded in July. At the Articles of Incorporation. The new shares of pre-
the end of 2014, the BMW Group had a market capitali- ferred stock carry the same rights as existing shares of
18 General Information on the BMW Group sation of approximately € 58 billion, making it one of the preferred stock and were issued to enable employees
18 Business Model
Top 10 of the most valuable stock corporations listed in to obtain an equity participation in the company. In ad-
23 Report on Economic Position Germany. dition, 20 shares of preferred stock were bought back
via the stock market in order to service the Employee
Environment
26 Overall Assessment by Management Employee Share Programme Share Programme.
Performance Indicators BMW AG has enabled its employees to participate in its
29 Review of Operations success for more than 40 years. Since 1989, this participa- Dividend increase
Position and Net Assets tion has taken the form of an Employee Share Programme. In view of the strong earnings performance for the year,
61 Comments on Financial Statements In total, 239,777 shares of preferred stock were issued to the Board of Management and the Supervisory Board
of BMW AG
64 Events after the End of the employees in 2014 as part of this Programme. will propose to the Annual General Meeting to use
Reporting Period
BMW AG’s unappropriated profit of € 1,904 million to
Opportunities In this context, and with the approval of the Supervisory pay a dividend of € 2.90 for each share of common stock
65 Outlook
Board, BMW AG’s share capital was increased by the (2013: € 2.60) and a dividend of € 2.92 for each share of
82 Internal Control System and Risk Board of Management by € 239,757 from € 656,254,983 preferred stock (2013: € 2.62), giving a distribution rate
to € 656,494,740 by the issue of 239,757 new non-voting of 32.7 % for 2014 (2013: 32.0 %).
rocess
BMW stock
2014 2013 2012 2011 2010
Common stock
Number of shares in 1,000 601,995 601,995 601,995 601,995 601,995
Stock exchange price in €1
Year-end closing price 89.77 85.22 72.93 51.76 58.85
High 95.51 85.42 73.76 73.52 64.80
Low 77.41 63.93 53.16 45.04 28.65
Preferred stock
Number of shares in 1,000 54,500 54,260 53,994 53,571 53,163
Stock exchange price in €1
Year-end closing price 67.84 62.09 48.76 36.55 38.50
High 74.60 64.65 49.23 45.98 41.90
Low 59.08 48.69 35.70 32.01 21.45
Key data per share in €
Dividend
Common stock 2.90 2 2.60 2.50 2.30 1.30
Preferred stock 2.92 2 2.62 2.52 2.32 1.32
Earnings per share of common stock 3 8.83 8.08 6 7.77 7.45 4.91
Earnings per share of preferred stock 4 8.85 8.10 6 7.79 7.47 4.93
5
Cash flow 14.36 15.19 6 13.98 12.38 12.45
Equity 57.03 54.25 6 46.35 41.34 36.53
1
Xetra closing prices.
2
Proposed by management.
3
Annual average weighted amount.
4
Stock weighted according to dividend entitlements.
5
Cash inflow from operating activities of the Automotive segment.
6
Ratings remain at top level

The BMW Group continues to have the best ratings in
the European automobile sector. Since December 2013,
BMW AG has a long-term rating of A+ (stable outlook)
and a short-term rating of A-1 from the rating agency
Standard & Poor’s. The equivalent ratings from the
rating agency Moody’s were A2 (stable outlook) and P-1.
These rating assessments underline the BMW Group’s
robust financial profile and solid creditworthiness.
Thanks to these attributes, the company not only has
good access to international capital markets, it also bene-
fits from a ttractive refinancing conditions, which are
particularly helpful for the BMW Group’s financial ser-
vices business.
Intensive communication with capital markets

The BMW Group continued to keep analysts, private
and institutional investors, and rating agencies up to
date throughout 2014 by means of its regular quarterly
and year-end financial reports. In addition, numerous
one-to-one discussions, group discussions and road-
shows addressed a broad range of capital market partici-
pants. These activities also included roadshows for in-
vestors interested in socially responsible investment
(SRI) and wishing to incorporate sustainability criteria
in their investment decisions as well as a series of events
for debt capital investors and credit analysts. Communi-
cation focused primarily on the launch of numerous
new models, BMW i and alternative drive systems, and
developments on the Chinese market. In addition to
presenting new models (including the BMW i8 and the
2 Series Active Tourer) and arranging various events
and test drives in the USA and Europe, we also organised
a Capital Markets Day in China for analysts and investors.
90
GROUP FINANCIAL STATEMENTS

BMW Group
Income Statements for Group and Segments
Statement of Comprehensive Income for Group
Income Statements for Group and Segments

in € million
Note Group Automotive
(unaudited supplementary information)
2014 2013* 2014 2013*
Revenues 10 80,401 76,059 75,173 70,630

Cost of sales 11 – 63,396 – 60,791 – 61,221 – 57,778
Gross profit 17,005 15,268 13,952 12,852
Selling and administrative expenses 12 – 7,892 – 7,257 – 6,645 – 6,114

Other operating income 13 877 842 749 742
Other operating expenses 13 – 872 – 875 – 812 – 831
Profit / loss before financial result 9,118 7,978 7,244 6,649
Result from equity accounted investments 14 655 407 655 407
Interest and similar income 15 200 183 331 303
Interest and similar expenses 15 – 519 – 469 – 620 – 535
Other financial result 16 – 747 – 206 – 724 – 263
Financial result – 411 – 85 – 358 – 88
Profit / loss before tax 8,707 7,893 6,886 6,561
Income taxes 17 – 2,890 – 2,564 – 2,365 – 2,153

90 GROUP FINANCIAL S TATEMENTS Net profit / loss 5,817 5,329 4,521 4,408
90 Income Statements
90 Statement of Attributable to minority interest 35 19 26 7 17
Attributable to shareholders of BMW AG 35 5,798 5,303 4,514 4,391
92 Balance Sheets
94 Cash Flow Statements Basic earnings per share of common stock in € 18 8.83 8.08
96 Group Statement of Changes in
Equity Basic earnings per share of preferred stock in € 18 8.85 8.10
98 Notes
Dilutive effects – –
98 Accounting Principles and
Policies Diluted earnings per share of common stock in € 18 8.83 8.08
Diluted earnings per share of preferred stock in € 18 8.85 8.10
123 Notes to the Statement
of Comprehensive Income
124 Notes to the Balance Sheet *
Statement of Comprehensive Income for Group

in € million
Note
2014 2013*
Remeasurement of the net defined benefit liability for pension plans 36 – 2,298 1,308
Deferred taxes 706 – 372
Items not expected to be reclassified to the income statement in the future – 1,592 936
Available-for-sale securities 40 8

Financial instruments used for hedging purposes – 2,194 1,357
Other comprehensive income from equity accounted investments – 48 – 7
Currency translation foreign operations 764 – 633
Items expected to be reclassified to the income statement in the future – 706 318
Other comprehensive income for the period after tax 21 – 2,298 1,254
Total comprehensive income 3,519 6,583
Total comprehensive income attributable to minority interests 19 26

Total comprehensive income attributable to shareholders of BMW AG 35 3,500 6,557
*
91 Group Financial Statements
Motorcycles Financial Services Other Entities Eliminations

(unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information)
2014 2013 2014 2013* 2014 2013 2014 2013*
1,679 1,504 20,599 19,874 7 6 – 17,057 – 15,955 Revenues

– 1,365 – 1,253 – 17,783 – 17,270 – – 16,973 15,510 Cost of sales
314 251 2,816 2,604 7 6 – 84 – 445 Gross profit
– 201 – 177 – 1,035 – 953 – 28 – 23 17 10 Selling and administrative expenses
– 7 73 57 136 115 – 81 – 79 Other operating income
– 1 – 2 – 98 – 65 – 44 – 54 83 77 Other operating expenses
112 79 1,756 1,643 71 44 – 65 – 437 Profit / loss before financial result
– – – – – – – – Result from equity accounted investments

– – 4 5 1,295 1,340 – 1,430 – 1,465 Interest and similar income
– 5 – 3 – 29 – 27 – 1,197 – 1,279 1,332 1,375 Interest and similar expenses
– – – 8 – 2 – 15 59 – – Other financial result
– 5 – 3 – 33 – 24 83 120 – 98 – 90 Financial result
107 76 1,723 1,619 154 164 – 163 – 527 Profit / loss before tax
– 34 – 25 – 525 – 518 – 49 – 68 83 200 Income taxes
73 51 1,198 1,101 105 96 – 80 – 327 Net profit / loss
– – 11 8 1 1 – – Attributable to minority interest

73 51 1,187 1,093 104 95 – 80 – 327 Attributable to shareholders of BMW AG
Basic earnings per share of common stock in €

Basic earnings per share of preferred stock in €
Dilutive effects
Diluted earnings per share of common stock in €
Diluted earnings per share of preferred stock in €
92
BMW Group
Balance Sheets for Group and Segments at 31 December
Assets
Note Group Automotive
(unaudited supplementary information)
in € million 2014 31.12. 2013* 1.1. 2013* 2014 2013*
Intangible assets 23 6,499 6,179 5,207 5,999 5,646

Property, plant and equipment 24 17,182 15,168 13,376 16,863 14,863
Leased products 25 30,165 25,914 24,468 3 19
Investments accounted for using the equity method 26 1,088 638 505 1,088 638
Other investments 27 408 553 548 5,110 5,253
Receivables from sales financing 28 37,438 32,616 32,309 – –
Financial assets 29 2,024 2,593 2,148 447 1,183
Deferred tax 17 2,061 1,620 1,967 3,253 2,226
Other assets 31 1,094 912 770 3,662 3,847
Non-current assets 97,959 86,193 81,298 36,425 33,675
Inventories 32 11,089 9,595 9,732 10,698 9,269

Trade receivables 33 2,153 2,449 2,543 1,887 2,184
Receivables from sales financing 28 23,586 21,501 20,605 – –
Financial assets 29 5,384 5,559 4,612 3,952 4,479
Current tax 30 1,906 1,151 966 1,186 1,002
Other assets 31 5,038 4,258 3,664 19,231 15,480
Cash and cash equivalents 34 7,688 7,671 8,374 5,752 6,775
90 GROUP FINANCIAL S TATEMENTS Assets held for sale – – 45 – –
Current assets 56,844 52,184 50,541 42,706 39,189
90 Statement of
92 Balance Sheets Total assets 154,803 138,377 131,839 79,131 72,864
94 Cash Flow Statements
Equity
98 Notes
98 Accounting Principles and Equity and liabilities
Policies
116 Notes to the Income Statement Note Group Automotive
123 Notes to the Statement (unaudited supplementary information)
in € million 2014 31.12. 2013* 1.1. 2013* 2014 2013*
165 Segment Information Subscribed capital 35 656 656 656
Capital reserves 35 2,005 1,990 1,973
Revenue reserves 35 35,621 33,122 28,510
Accumulated other equity 35 – 1,062 – 356 – 674
Equity attributable to shareholders of BMW AG 35 37,220 35,412 30,465
Minority interest 35 217 188 107

Equity 37,437 35,600 30,572 31,045 30,909
Pension provisions 36 4,604 2,303 3,813 2,741 938

Other provisions 37 4,268 3,828 3,481 3,777 3,075
Deferred tax 17 1,974 2,459 2,094 421 1,072
Financial liabilities 39 43,167 39,450 39,095 1,933 1,604
Other liabilities 40 4,275 3,603 3,404 5,445 4,677
Non-current provisions and liabilities 58,288 51,643 51,887 14,317 11,366
Other provisions 37 4,522 3,412 3,246 3,746 3,040

Current tax 38 1,590 2,319 2,463 1,050 1,021
Financial liabilities 39 37,482 30,854 30,412 3,250 725
Trade payables 41 7,709 7,485 6,437 6,929 6,774
Other liabilities 40 7,775 7,064 6,792 18,794 19,029
Liabilities in conjunction with assets held for sale – – 30 – –
Current provisions and liabilities 59,078 51,134 49,380 33,769 30,589
Total equity and liabilities 154,803 138,377 131,839 79,131 72,864
*
Assets
2014 2013 2014 2013 2014 2013* 2014 2013*
54 63 445 469 1 1 – – Intangible assets

285 271 34 34 – – – – Property, plant and equipment
– – 35,366 30,230 – – – 5,204 – 4,335 Leased products
– – – – – – – – Investments accounted for using the equity method
– – 6 6 5,808 5,754 – 10,516 – 10,460 Other investments
– – 37,438 32,616 – – – – Receivables from sales financing
– – 210 276 1,751 1,779 – 384 – 645 Financial assets
– – 287 285 367 290 – 1,846 – 1,181 Deferred tax
20 – 1,913 1,436 21,895 19,677 – 26,396 – 24,048 Other assets
359 334 75,699 65,352 29,822 27,501 – 44,346 – 40,669 Non-current assets
383 318 8 8 – – – – Inventories

128 120 137 145 1 – – – Trade receivables
– – 23,586 21,501 – – – – Receivables from sales financing
– – 1,048 826 898 936 – 514 – 682 Financial assets
– – 102 89 618 60 – – Current tax
– – 3,953 3,530 36,682 32,775 – 54,828 – 47,527 Other assets
– – 1,783 879 153 17 – – Cash and cash equivalents
– – – – – – – – Assets held for sale
511 438 30,617 26,978 38,352 33,788 – 55,342 – 48,209 Current assets
870 772 106,316 92,330 68,174 61,289 – 99,688 – 88,878 Total assets
Equity and liabilities

2014 2013 2014 2013* 2014 2013* 2014 2013*
Subscribed capital
Capital reserves
Revenue reserves
Accumulated other equity
Equity attributable to shareholders of BMW AG
Minority interest
– – 9,357 8,388 12,031 10,781 – 14,996 – 14,478 Equity
78 29 75 40 1,710 1,296 – – Pension provisions

160 141 273 289 58 323 – – Other provisions
– – 5,078 4,171 13 6 – 3,538 – 2,790 Deferred tax
– – 14,695 14,376 26,923 24,115 – 384 – 645 Financial liabilities
357 318 23,680 21,134 51 68 – 25,258 – 22,594 Other liabilities
595 488 43,801 40,010 28,755 25,808 – 29,180 – 26,029 Non-current provisions and liabilities
62 57 432 309 282 3 – 3 Other provisions

– – 162 155 378 1,143 – – Current tax
– – 19,122 16,006 15,624 14,805 – 514 – 682 Financial liabilities
192 204 571 502 17 5 – – Trade payables
21 23 32,871 26,960 11,087 8,744 – 54,998 – 47,692 Other liabilities
– – – – – – – – Liabilities in conjunction with assets held for sale
275 284 53,158 43,932 27,388 24,700 – 55,512 – 48,371 Current provisions and liabilities
870 772 106,316 92,330 68,174 61,289 – 99,688 – 88,878 Total equity and liabilities
94
BMW Group
Cash Flow Statements for Group and Segments
Note Group
in € million 2014 20131

Reconciliation between net profit and cash inflow / outflow from operating activities
Current tax 2,774 2,581
Other interest and similar income / expenses 127 147
Depreciation and amortisation of other tangible, intangible and investment assets 4,323 3,832
Change in provisions 1,103 480
Change in leased products – 2,720 – 2,048
Change in receivables from sales financing – 3,898 – 4,501
Change in deferred taxes 116 – 17
Other non-cash income and expense items 331 – 552
Gain / loss on disposal of tangible and intangible assets and marketable securities – 63 – 21
Result from equity accounted investments – 655 – 407
Changes in working capital – 551 986
Change in inventories – 971 – 195
Change in trade receivables 379 22
Change in trade payables 41 1,159
Change in other operating assets and liabilities 323 969
90 GROUP FINANCIAL S TATEMENTS
Income taxes paid – 4,252 – 2,787
90 Statement of Interest received 137 136
92 Balance Sheets Cash inflow / outflow from operating activities 44 2,912 4,127
96 Group Statement of Changes in Investment in intangible assets and property, plant and equipment – 6,099 – 6,693
Equity
98 Notes Proceeds from the disposal of intangible assets and property, plant and equipment 36 22
Expenditure for investments – 99 – 76
Policies
116 Notes to the Income Statement Proceeds from the disposal of investments 190 137
Investments in marketable securities and term deposits – 4,216 – 4,131
124 Notes to the Balance Sheet Proceeds from the sale of marketable securities and from matured term deposits 4,072 3,250
165 Segment Information Cash inflow / outflow from investing activities 44 – 6,116 – 7,491
Issue / buy-back of treasury shares – –

Payments into equity 15 17
Payment of dividend for the previous year – 1,715 – 1,653
Intragroup financing and equity transactions – –
Interest paid – 133 – 122
Proceeds from the issue of bonds 10,892 8,982
Repayment of bonds – 7,249 – 7,242
Proceeds from new non-current other financial liabilities 5,900 6,626
Repayment of non-current other financial liabilities – 5,697 – 4,996
Change in current other financial liabilities 2,132 – 721
Change in commercial paper – 1,012 1,812
Cash inflow / outflow from financing activities 44 3,133 2,703
Effect of exchange rate on cash and cash equivalents 86 – 89
Effect of changes in composition of Group on cash and cash equivalents 2 47
Change in cash and cash equivalents 44 17 – 703
Cash and cash equivalents as at 1 January 7,671 8,374

Cash and cash equivalents as at 31 December 7,688 7,671
1
2
Interest relating to financial services business is classified as revenues / cost of sales.
Automotive Financial Services

(unaudited supplementary information) (unaudited supplementary information)
2014 20131 2014 20131
4,521 4,408 1,198 1,101 Net profit

Reconciliation between net profit and cash inflow / outflow from operating activities
2,786 2,516 – 40 9 Current tax
159 154 24 2 17 2 Other interest and similar income / expenses
4,230 3,747 29 20 Depreciation and amortisation of other tangible, intangible and investment assets
1,034 374 109 153 Change in provisions
15 109 – 3,309 – 2,895 Change in leased products
– – – 3,898 – 4,501 Change in receivables from sales financing
– 124 – 239 383 523 Change in deferred taxes
– 5 – 56 14 54 Other non-cash income and expense items
– 54 – 21 8 – Gain / loss on disposal of tangible and intangible assets and marketable securities
– 655 – 407 – – Result from equity accounted investments
– 552 1,018 70 24 Changes in working capital
– 907 – 229 – 4 Change in inventories
371 53 14 – 25 Change in trade receivables
– 16 1,194 56 45 Change in trade payables
419 657 858 269 Change in other operating assets and liabilities
– 2,531 – 2,487 – 161 – 132 Income taxes paid
180 191 – 2 – 2 Interest received
9,423 9,964 – 4,715 – 5,358 Cash inflow / outflow from operating activities
– 6,021 – 6,599 – 9 – 9 Investment in intangible assets and property, plant and equipment
36 15 – 7 Proceeds from the disposal of intangible assets and property, plant and equipment
– 134 – 514 – – Expenditure for investments
177 137 – 163 Proceeds from the disposal of investments
– 3,775 – 3,945 – 458 – 179 Investments in marketable securities and term deposits
3,881 2,908 170 342 Proceeds from the sale of marketable securities and from matured term deposits
– 5,836 – 7,998 – 297 324 Cash inflow / outflow from investing activities
– – – – Issue / buy-back of treasury shares

15 17 – – Payments into equity
– 1,715 – 1,653 – – Payment of dividend for the previous year
– 4,299 – 582 4,094 3,844 Intragroup financing and equity transactions
– 136 – 150 – 2 – 2 Interest paid
– – 1,009 1,099 Proceeds from the issue of bonds
– – – 733 – 1,383 Repayment of bonds
452 85 5,298 6,015 Proceeds from new non-current other financial liabilities
– 41 – 26 – 4,814 – 4,940 Repayment of non-current other financial liabilities
1,042 125 1,073 517 Change in current other financial liabilities
– – 489 – – Change in commercial paper
– 4,682 – 2,673 5,927 5,152 Cash inflow / outflow from financing activities
70 – 53 – 11 – 36 Effect of exchange rate on cash and cash equivalents
2 47 – – Effect of changes in composition of Group on cash and cash equivalents
– 1,023 – 713 904 82 Change in cash and cash equivalents
6,775 7,488 879 797 Cash and cash equivalents as at 1 January

5,752 6,775 1,783 879 Cash and cash equivalents as at 31 December
96
BMW Group
Group Statement of Changes in Equity
in € million Note Subscribed Capital Revenue reserves*

capital reserves
1 January 2013, as originally reported 35 656 1,973 28,544
Adjustment IAS 8 * – – – 34

1 January 2013 (adjusted) 35 656 1,973 28,510
Dividends paid – – – 1,640
Net profit – – 5,303

Other comprehensive income for the period after tax – – 936
Comprehensive income 31 December 2013 – – 6,239
Subscribed share capital increase out of Authorised Capital – – –

Premium arising on capital increase relating to preferred stock – 17 –
Other changes – – 13
31 December 2013 35 656 1,990 33,122
90 Income Statements *
90 Statement of
92 Balance Sheets
Equity
98 Notes
98 Accounting Principles and in € million Note Subscribed Capital Revenue reserves
Policies
capital reserves
1 January 2014 35 656 1,990 33,122
Dividends paid – – – 1,707
Net profit – – 5,798

Other comprehensive income for the period after tax – – – 1,592
Comprehensive income 31 December 2014 – – 4,206
Subscribed share capital increase out of Authorised Capital – – –

Premium arising on capital increase relating to preferred stock – 15 –
Other changes – – –
31 December 2014 35 656 2,005 35,621
Accumulated other equity Equity Minority Total

attributable to interest
shareholders
of BMW AG
Translation Securities Derivative
differences* financial
instruments
– 984 108 202 30,499 107 30,606 1 January 2013, as originally reported
– – – – 34 – – 34 Adjustment IAS 8 *

– 984 108 202 30,465 107 30,572 1 January 2013 (adjusted)
– – – – 1,640 – –1,640 Dividends paid
– – – 5,303 26 5,329 Net profit

– 643 27 934 1,254 – 1,254 Other comprehensive income for the period after tax
– 643 27 934 6,557 26 6,583 Comprehensive income 31 December 2013
– – – – – – Subscribed share capital increase out of Authorised Capital

– – – 17 – 17 Premium arising on capital increase relating to preferred stock
– – – 13 55 68 Other changes
– 1,627 135 1,136 35,412 188 35,600 31 December 2013
Accumulated other equity Equity Minority Total

attributable to interest
shareholders
of BMW AG
Translation Securities Derivative
differences financial
instruments
– 1,627 135 1,136 35,412 188 35,600 1 January 2014
– – – – 1,707 – – 1,707 Dividends paid
– – – 5,798 19 5,817 Net profit

904 6 – 1,616 – 2,298 – – 2,298 Other comprehensive income for the period after tax
904 6 – 1,616 3,500 19 3,519 Comprehensive income 31 December 2014
– – – – – – Subscribed share capital increase out of Authorised Capital

– – – 15 – 15 Premium arising on capital increase relating to preferred stock
– – – – 10 10 Other changes
– 723 141 – 480 37,220 217 37,437 31 December 2014
98
BMW Group
Notes to the Group Financial Statements
Accounting Principles and Policies
1 Basis of preparation The inclusion of the financial services activities of the

The consolidated financial statements of Bayerische Group therefore has an impact on the Group Financial
Motoren Werke Aktiengesellschaft (BMW Group Finan Statements.
cial Statements or Group Financial Statements) at 31 De
cember 2014 have been drawn up in accordance with Inter-segment transactions – relating primarily to inter
International Financial Reporting Standards (IFRSs) as nal sales of products, the provision of funds and the
endorsed by the EU. The designation “IFRSs” also in related interest – are eliminated in the “Eliminations”
cludes all valid International Accounting Standards (IASs). column. Further information regarding the allocation
All Interpretations of the IFRS Interpretations Commit of activities of the BMW Group to segments and a
tee (IFRICs) mandatory for the financial year 2014 are description of the segments is provided in note 50.
also applied.
In conjunction with the refinancing of financial services
The Group Financial Statements comply with § 315 a of business, a significant volume of receivables arising
the German Commercial Code (HGB). This provision, from retail customer and dealer financing is sold. Simi
in conjunction with the Regulation (EC) No. 1606 / 2002 larly, rights and obligations relating to leases are sold.
of the European Parliament and Council of 19 July The sale of receivables is a well-established instrument
2002, relating to the application of International Finan used by industrial companies. These transactions usu
cial Reporting Standards, provides the legal basis for ally take the form of asset-backed financing transac
preparing consolidated financial statements in accord tions involving the sale of a portfolio of receivables to a
ance with international standards in Germany and trust which, in turn, issues marketable securities to re
applies to financial years beginning on or after 1 January finance the purchase price. The BMW Group continues
90 Income Statements 2005. to “service” the receivables and receives an appropriate
90 Statement of fee for these services. In accordance with IFRS 10 (Con
92 Balance Sheets The BMW Group and segment income statements are solidated Financial Statements) such assets remain in
presented using the cost of sales method. The Group the Group Financial Statements although they have been
Equity and segment balance sheets correspond to the classi legally sold, since all the conditions relevant for control
98 Notes
fication provisions contained in IAS 1 (Presentation of are met. Gains and losses relating to the sale of such
Policies Financial Statements). assets are not recognised until the assets are removed
from the Group balance sheet. The balance sheet value of
of Comprehensive Income In order to improve clarity, various items are aggregated the assets sold at 31 December 2014 totalled € 10.9 bil
149 Other Disclosures in the income statements and balance sheets presented. lion (31 December 2013: € 10.1 billion).
165 Segment Information These items are disclosed and analysed separately in the
notes. In addition to credit financing and leasing contracts, the
Financial Services segment also brokers insurance busi
A Statement of Comprehensive Income is presented at ness via cooperation arrangements entered into with
Group level reconciling the net profit to comprehensive local insurance companies. These activities are not ma
income for the year. terial to the BMW Group as a whole.
In order to provide a better insight into the net assets, The Group currency is the euro. All amounts are dis
financial position and performance of the BMW Group closed in millions of euros (€ million) unless stated
and going beyond the requirements of IFRS 8 (Operat otherwise.
ing Segments), the Group Financial Statements also
include balance sheets and income statements for the Bayerische Motoren Werke Aktiengesellschaft has its
Automotive, Motorcycles, Financial Services and Other seat in Munich, Petuelring 130, and is registered in the
Entities segments. The Group Cash Flow Statement is Commercial Register of the District Court of Munich
supplemented by statements of cash flows for the Auto under the number HRB 42243.
motive and Financial Services segments. This supple
mentary information is unaudited. All consolidated subsidiaries have the same year end as
BMW AG with the exception of BMW India Private
In order to facilitate the sale of its products, the BMW Ltd., Gurgaon, and BMW India Financial Services Private
Group provides various financial services – mainly loan Ltd., Gurgaon, both of whose year-ends are 31 March in
and lease financing – to both retail customers and dealers. accordance with local legal requirements.
The Group Financial Statements, drawn up in accord inancial Statements and the Combined Management
F
ance with § 315a HGB, and the Combined Management Report can be downloaded from the BMW Group web
Report for the financial year ended 31 December 2014 site at www.bmwgroup.com / ir.
will be submitted to the operator of the electronic version
of the German Federal Gazette and can be obtained via The Board of Management authorised the Group Finan
the Company Register website. Printed copies will also cial Statements for issue on 19 February 2015.
be made available on request. In addition the Group
2 Consolidated companies
The scope of the consolidated financial statements is trusts, almost all of which are used for asset-backed
based on the application of IFRS 10 (Consolidated financing transactions.
Financial Statements) and IFRS 11 (Joint Arrangements).
The number of subsidiaries, including the special pur
The BMW Group Financial Statements include, besides pose securities fund and the special purpose trusts,
BMW AG, all material subsidiaries, including one consolidated in the Group Financial Statements
special purpose securities fund and 30 special purpose changed in 2014 as follows:
Germany Foreign Total
Included at 31 December 2013 20 167 187

Included for the first time in 2014 2 13 15
No longer included in 2014 – 13 13
Included at 31 December 2014 22 167 189
43 subsidiaries (2013: 48), either dormant or generating vestments”, measured at cost less – where applicable –
a negligible volume of business, and four joint opera accumulated impairment losses.
tions (2013: 1) are not consolidated on the grounds
that their inclusion would not influence the economic A “List of Group Investments” pursuant to § 313 (2)
decisions of users of the Group Financial Statements. HGB will be submitted to the operator of the electronic
Non-inclusion of operating subsidiaries and joint oper version of the German Federal Gazette. This list, along
ations reduces total Group revenues by 0.3 % (2013: with the “List of Third Party Companies which are not
1.0 %). of Minor Importance for the Group”, will also be posted
on the BMW Group website at www.bmwgroup.com / ir.
The joint operations – SGL Automotive Carbon Fibers The List of Group Investments, the List of Third Party
GmbH & Co. KG, Munich, SGL Automotive Carbon Companies which are not of Minor Importance for the
Fibers Verwaltungs GmbH, Munich, and SGL Automo Group and the full list of consolidated companies are
tive Carbon Fibers LLC, Dover, DE – are consolidated also posted as appendices on the BMW Group website.
proportionately for the first time in the financial year
2014 on the basis of the BMW Group’s 49 % sharehold BMW Madrid S. L., Madrid, BMW Amsterdam B. V.,
ing. These entities supply carbon fibre and carbon fibre Amsterdam, BMW Den Haag B. V., The Hague, BMW
fabrics for vehicle production. Further information is Retail Nederland B. V., The Hague, BMW Milano
provided in note 9. S. r. l., Milan, BMW Distribution S. A. S., Montigny-le-
Bretonneux, BMW Vermögensverwaltungs GmbH,
The joint ventures – BMW Brilliance Automotive Ltd., Munich, BMW Beteiligungs GmbH & Co. KG, Munich,
Shenyang, DriveNow GmbH & Co. KG, Munich, and and BMW International Holding B. V., The Hague, were
DriveNow Verwaltungs GmbH, Munich – are accounted consolidated for the first time in the financial year 2014.
for using the equity method. As in the previous year,
five participations are not consolidated using the equity BMW Österreich Finanzierungs GmbH, Steyr, was
method on the grounds of immateriality. They are in merged with BMW Motoren GmbH, Steyr, and there
cluded in the Group balance sheet in the line “Other in fore ceased to be a consolidated company. Noord Lease
100
B. V., Groningen, was sold and therefore ceased to be a The Group reporting entity also changed by comparison
consolidated company. In addition, Alphabet Belgium to the previous year as a result of the first-time consoli
N. V., Bornem, and Bavaria NTTBL Company Ltd., dation of six special purpose trusts and the deconsolida
Dublin, were liquidated and ceased to be consolidated tion of eight special purpose entities.
companies. The British Motor Corporation Ltd.,
Bracknell, was wound up and ceased to be a consolidated The changes to the composition of the Group do not have
company. a material impact on the results of operations, financial
position or net assets of the Group.
3 Sale of business of Management put up Noord Lease B. V., Groningen

With the purchase of the ING Car Lease Group in for sale during the financial year 2014. At the end of
2011, the BMW Group also acquired Noord Lease B. V., a bidding process, Noord Lease B. V., Groningen, was
Groningen. This entity was managed alongside Alphabet sold to Noordlease Midco B. V., Groningen. The pur
Nederland B. V., Breda, as a second fleet leasing com chase agreement was signed in June 2014 and the
pany in the Netherlands, with a strong regional focus shares transferred in August 2014. The deconsolidation
and a high proportion of private leasing. As part of an of Noord Lease B. V., Groningen, gave rise in the third
evaluation of the strategic direction of fleet business quarter to a gain of € 7.4 million, which is included in
in the Netherlands, it was decided to focus on only one other operating income and expenses of the Financial
company in this region. Accordingly, BMW AG’s Board Services segment.
90 Statement of 4 Consolidation principles
92 Balance Sheets The equity of subsidiaries is consolidated in accordance In the case of a joint operation, the parties that have joint
with IFRS 3 (Business Combinations). IFRS 3 requires control of the arrangement have rights to the assets,
Equity that all business combinations are accounted for using and obligations for the liabilities, relating to the arrange
98 Notes
the acquisition method, whereby identifiable assets and ment. Assets, liabilities, revenues and expenses of a
Policies liabilities acquired are measured at their fair value at joint operation are recognised proportionately in the
acquisition date. An excess of acquisition cost over the Group Financial Statements on the basis of the BMW
of Comprehensive Income Group’s share of the net fair value of identifiable assets, Group’s rights and obligations.
149 Other Disclosures liabilities and contingent liabilities is recognised as good
165 Segment Information will as a separate balance sheet line item and allocated Investments accounted for using the equity method
to the relevant cash-generating unit (CGU). Goodwill of (joint ventures and associated companies) are measured
€ 91 million which arose prior to 1 January 1995 remains at the BMW Group’s share of equity taking account of
netted against reserves. fair value adjustments. Any difference between the cost
of investment and the Group’s share of equity is ac
Receivables, payables, provisions, income and expenses counted for in accordance with the acquisition method.
and profits between consolidated companies (intra-group Investments in other companies are accounted for as
profits) are eliminated on consolidation. a general rule using the equity method when significant
influence can be exercised (IAS 28 Investments in Asso
Joint operations and joint ventures are forms of joint ciates and Joint Ventures). As a general rule, there is a
arrangements. Such an arrangement exists when the rebuttable assumption that the Group has significant in
BMW Group jointly carries out activities on the basis of fluence if it holds between 20 % and 50 % of the associated
a contractual agreement with a third party that requires company’s or joint venture’s voting power.
the unanimous consent of both parties with respect to
all significant activities of the joint arrangement.
5 Foreign currency translation come statement are also recognised directly in accumu
The financial statements of consolidated companies lated other equity.
which are drawn up in a foreign currency are translated
using the functional currency concept (IAS 21 The Foreign currency receivables and payables in the single
Effects of Changes in Foreign Exchange Rates) and the entity accounts of BMW AG and subsidiaries are re
modified closing rate method. The functional currency corded, at the date of the transaction, at cost. At the end
of a subsidiary is determined as a general rule on the of the reporting period, foreign currency receivables
basis of the primary economic environment in which it and payables are translated at the closing exchange rate.
operates and corresponds therefore usually to the rele The resulting unrealised gains and losses as well as the
vant local currency. Income and expenses of foreign subsequent realised gains and losses arising on settle
subsidiaries are translated in the Group Financial State ment are recognised in the income statement in accord
ments at the average exchange rate for the year and ance with the underlying substance of the relevant
assets and liabilities are translated at the closing rate. transactions.
Exchange differences arising from the translation of
shareholders’ equity are recognised directly in accumu The exchange rates of those currencies which have a ma
lated other equity. Exchange differences arising from terial impact on the Group Financial Statements were as
the use of different exchange rates to translate the in follows:
Closing rate Average rate
31.12. 2014 31.12. 2013 2014 2013
US Dollar 1.21 1.38 1.33 1.33

British Pound 0.78 0.83 0.81 0.85
Chinese Renminbi 7.53 8.34 8.19 8.16
Japanese Yen 144.95 144.55 140.38 129.70
Russian Rouble 70.98 45.29 51.03 42.34
6 Accounting policies the effective interest method and reported as revenues

The financial statements of BMW AG and of its subsidi within the line item “Interest income on loan financing”.
aries in Germany and elsewhere have been prepared for If the sale of products includes a determinable amount
consolidation purposes using uniform accounting poli for subsequent services (multiple-component contracts),
cies in accordance with IFRS 10 (Consolidated Financial the related revenues are deferred and recognised as
Statements). income over the relevant service period. Amounts are
normally recognised as income by reference to the pat
Revenues from the sale of products are recognised when tern of related expenditure. Profits arising on the sale
the risks and rewards of ownership of the goods are of vehicles for which a Group company retains a repur
transferred to the dealer or customer, provided that the chase commitment (buy-back contracts) are not recog
amount of revenue can be measured reliably, it is nised until such profits have been realised. The differ
probable that the economic benefits associated with the ence between the sales and buy-back price is accounted
transaction will flow to the entity and costs incurred for as deferred income and recognised in instalments as
or to be incurred in respect of the sale can be measured revenue over the contract term.
reliably. Revenues are stated net of settlement discount,
bonuses and rebates. Revenues also include lease rentals Cost of sales comprises the cost of products sold and the
and interest income earned in conjunction with finan acquisition cost of purchased goods sold. In addition
cial services. Revenues from leasing instalments relate to to directly attributable material and production costs, it
operating leases and are recognised in the income state also includes research costs and development costs not
ment on a straight line basis over the relevant term of recognised as assets, the amortisation of capitalised
the lease. Interest income from finance leases and from development costs as well as overheads (including depre
customer and dealer financing are recognised using ciation of property, plant and equipment and amortisation
102
of other intangible assets relating to production), write- statement (as personnel expense) over the vesting period
downs on inventories, freight and insurance costs re of the programmes and recognised in the balance sheet
lating to deliveries to dealers and agency fees on direct as a provision.
sales. Expenses which are directly attributable to finan
cial services business (including depreciation on leased The share-based remuneration programme for Board
products), the interest expense from refinancing the of Management members and senior heads of depart
entire financial services business as well as the expense ment entitles BMW AG to elect whether to settle its
of risk provisions and write-downs relating to such busi commitments in cash or with shares of BMW AG com
ness are also reported in cost of sales. mon stock. Following the decision to settle in cash,
this programme is accounted for as a cash-settled
In accordance with IAS 20 (Accounting for Government share-based transaction. Further information on
Grants and Disclosure of Government Assistance), pub- share-based remuneration programmes is provided
lic sector grants are not recognised until there is reason in note 20.
able assurance that the conditions attaching to them
have been complied with and the grants will be received. Purchased and internally-generated intangible assets are
They are recognised as income over the periods neces recognised as assets in accordance with IAS 38 (Intan
sary to match them with the related costs which they are gible Assets), where it is probable that the use of the asset
intended to compensate. will generate future economic benefits and where the
costs of the asset can be determined reliably. Such assets
Basic earnings per share are computed in accordance with are measured at acquisition and / or manufacturing cost
IAS 33 (Earnings per Share). Basic earnings per share and, to the extent that they have a finite useful life,
90 Income Statements are calculated for common and preferred stock by di amortised over their estimated useful lives. With the ex
90 Statement of viding the Group net profit after minority interests, as ception of capitalised development costs, intangible
92 Balance Sheets attributable to each category of stock, by the average assets are generally amortised over their estimated use
number of outstanding shares. The net profit is accord ful lives of between three and ten years.
Equity ingly allocated to the different categories of stock. The
98 Notes
portion of the Group net profit for the year which is not Development costs for vehicle and engine projects are
Policies being distributed is allocated to each category of stock capitalised at manufacturing cost, to the extent that
based on the number of outstanding shares. Profits attributable costs can be measured reliably and both
of Comprehensive Income available for distribution are determined directly on the technical feasibility and successful marketing are as
149 Other Disclosures basis of the dividend resolutions passed for common sured. It must also be probable that the development
165 Segment Information and preferred stock. Diluted earnings per share are dis expenditure will generate future economic benefits.
closed separately. Capitalised development costs comprise all expenditure
that can be attributed directly to the development pro
Share-based remuneration programmes which are ex cess, including development-related overheads. Capi
pected to be settled in shares are, in accordance with talised development costs are amortised systematically
IFRS 2 (Share-based Payments), measured at their fair over the estimated product life (usually four to eleven
value at grant date. The related expense is recognised years) following start of production.
in the income statement (as personnel expense) over
the vesting period, with a contra (credit) entry recorded Goodwill arises on first-time consolidation of an acquired
against capital reserves. business when the cost of acquisition exceeds the
Group’s share of the fair value of the individually iden
Share-based remuneration programmes expected to be tifiable assets acquired and liabilities and contingent
settled in cash are revalued to their fair value at each liabilities assumed.
balance sheet date between the grant date and the settle
ment date and on the settlement date itself. The ex All items of property, plant and equipment are considered
pense for such programmes is recognised in the income to have finite useful lives. They are recognised at acqui
sition or manufacturing cost less scheduled depreciation property, plant and equipment with different useful
based on the estimated useful lives of the assets. De lives are depreciated separately.
preciation on property, plant and equipment reflects
the pattern of their usage and is generally computed us Systematic depreciation is based on the following useful
ing the straight-line method. Components of items of lives, applied throughout the BMW Group:
in years
Factory and office buildings, residential buildings, fixed installations in buildings and outside facilities 8 to 50
Plant and machinery 3 to 21
Other equipment, factory and office equipment 2 to 25
For machinery used in multiple-shift operations, depre are measured at manufacturing cost. All other leased
ciation rates are increased to account for the additional products are measured at acquisition cost. All leased
utilisation. products are depreciated over the period of the lease
using the straight-line method down to their expected
The cost of internally constructed plant and equipment residual value. Changes in residual value expectations
comprises all costs which are directly attributable to are recognised – in situations where the recoverable
the manufacturing process as well as an appropriate amount of the lease exceeds the carrying amount of the
proportion of production-related overheads. This in asset – by adjusting scheduled depreciation prospec
cludes production-related depreciation and an appro tively over the remaining term of the lease contract. If
priate proportion of administrative and social costs. the recoverable amount is lower than the expected
residual value, an impairment loss is recognised for the
As a general rule, borrowing costs are not included in shortfall. A test is carried out at each balance sheet
acquisition or manufacturing cost. Borrowing costs that date to determine whether an impairment loss recog
are directly attributable to the acquisition, construction nised in prior years no longer exists or has decreased.
or production of a qualifying asset are recognised as a In these cases, the carrying amount of the asset is in
part of the cost of that asset in accordance with IAS 23 creased to the recoverable amount. The higher carrying
(Borrowing Costs). amount resulting from the reversal may not, however,
exceed the rolled-forward amortised cost of the asset.
Non-current assets also include assets relating to leases.
The BMW Group uses property, plant and equipment as If there is any evidence of impairment of non-financial
lessee on the one hand and leases out vehicles produced assets (except inventories and deferred taxes), or if an
by the Group and other brands as lessor on the other. annual impairment test is required to be carried out –
IAS 17 (Leases) contains rules for determining, on the i. e. for intangible assets not yet available for use, intan
basis of risks and rewards, the economic owner of the gible assets with an indefinite useful life and goodwill
assets. In the case of finance leases, the assets are at acquired as part of a business combination – an impair
tributed to the lessee and in the case of operating leases ment test pursuant to IAS 36 (Impairment of Assets) is
the assets are attributed to the lessor. performed. Each individual asset is tested separately
unless the asset generates cash flows that are largely in
In accordance with IAS 17, assets leased under finance dependent of the cash flows from other assets or groups
leases are measured at their fair value at the inception of assets (cash-generating units / CGUs). For the purposes
of the lease or at the present value of the lease payments, of the impairment test, the asset’s carrying amount is
if lower. The assets are depreciated using the straight- compared with its recoverable amount, the latter defined
line method over their estimated useful lives or over the as the higher of the asset’s fair value less costs to sell and
lease period, if shorter. The obligations for future lease its value in use. An impairment loss is recognised when
instalments are recognised as other financial liabilities. the recoverable amount is lower than the asset’s carrying
amount. Fair value is the price that would be received
Where Group products are recognised by BMW Group to sell an asset in an orderly transaction between mar
entities as leased products under operating leases, they ket participants at the measurement date. The value in
104
use corresponds to the present value of future cash Investments accounted for using the equity method are
flows expected to be derived from an asset or group of (except when the investment is impaired) measured at
assets. the Group’s share of equity taking account of fair value
adjustments on acquisition. Investments accounted for
The first step of the impairment test is to determine the using the equity method comprise joint ventures and
value in use of an asset. If the calculated value in use is significant associated companies.
lower than the carrying amount of the asset, then its fair
value less costs to sell are also determined. If the latter Investments in non-consolidated Group companies and
is also lower than the carrying amount of the asset, then interests in associated companies not accounted for using
an impairment loss is recorded, reducing the carrying the equity method are reported as Other investments and
amount to the higher of the asset’s value in use or fair measured at cost or, if lower, at their fair value.
value less costs to sell. The value in use is determined
on the basis of a present value computation. Cash flows Participations are measured at their fair value. If this
used for the purposes of this calculation are derived value is not available or cannot be determined reliably,
from long-term forecasts approved by management. The participations are measured at cost.
long-term forecasts themselves are based on detailed
forecasts drawn up at an operational level and, based on Non-current marketable securities are measured ac
a planning period of six years, correspond roughly to cording to the category of financial asset to which they
a typical product’s life-cycle. For the purposes of calcu are classified. No held-for-trading financial assets are
lating cash flows beyond the planning period, the as included under this heading.
set’s assumed residual value does not take growth into
90 Income Statements account. Forecasting assumptions are continually A financial instrument is a contract that gives rise to a
90 Statement of brought up to date and regularly compared with exter financial asset of one entity and a financial liability
92 Balance Sheets nal sources of information. The assumptions used take or equity instrument of another entity. Once a BMW
account in particular of expectations of the profitability Group entity becomes party to such to a contract, the
Equity of the product portfolio, future market share develop financial instrument is recognised either as a financial
98 Notes
ments, macro-economic developments (such as currency, asset or as a financial liability.
Policies interest rate and raw materials prices) as well as the le
gal environment and past experience. Cash flows of the Financial assets are accounted for on the basis of the
of Comprehensive Income Automotive and Motorcycles CGUs are discounted us settlement date. On initial recognition, they are meas
149 Other Disclosures ing a risk-adjusted pre-tax weighted average cost of cap ured at their fair value. Transaction costs are included
165 Segment Information ital (WACC) of 12.0 % (2013: 12.0 %). In the case of the in the fair value unless the financial assets are allocated
Financial Services CGU, a sector-compatible pre-tax cost to the category “financial assets measured at fair value
of equity capital of 13.4 % (2013: 13.4 %) is applied. In through profit or loss”.
conjunction with the impairment tests for CGUs, sensi
tivity analyses are performed for the main assumptions. Subsequent to initial recognition, available-for-sale and
Analyses performed in the year under report confirmed, held-for-trading financial assets are measured at their
as in the previous year, that no impairment loss was re fair value. When market prices are not available, the fair
quired to be recognised. value of available-for-sale financial assets is measured
using appropriate valuation techniques e. g. discounted
If the reason for a previously recognised impairment loss cash flow analysis based on market information available
no longer exists, the impairment loss is reversed up to at the balance sheet date.
the level of the recoverable amount, capped at the level
of rolled-forward amortised cost. This does not apply Available-for-sale assets include non-current investments,
to goodwill: previously recognised impairment losses on securities and investment fund shares. This category
goodwill are not reversed. includes all non-derivative financial assets which are
not classified as “loans and receivables” or “held-to- balances or the incidence of similar events in the past
maturity investments” or as items measured “at fair are examples of such objective evidence. In the event of
value through profit and loss”. overdue receivables, impairment losses are always recog
nised individually based on the length of period of the
Loans and receivables which are not held for trading arrears. In the case of dealer financing receivables, the
and held-to-maturity financial investments with a fixed allocation of the dealer to a corresponding rating cate
term are measured at amortised cost using the effec gory is also deemed to represent objective evidence of
tive interest method. All financial assets for which pub impairment. If there is no objective evidence of impair
lished price quotations in an active market are not avail ment, impairment losses are recognised on financial as
able and whose fair value cannot be determined reliably sets using a portfolio approach based on similar groups
are required to be measured at cost. of assets. Company-specific loss probabilities and loss
ratios, derived from historical data, are used to measure
In accordance with IAS 39 (Financial Instruments: Recog impairment losses on similar groups of assets.
nition and Measurement), assessments are made regu
larly as to whether there is any objective evidence that a The recognition of impairment losses on receivables
financial asset or group of assets may be impaired. Im relating to industrial business is also, as far as possible,
pairment losses identified after carrying out an impair based on the same procedures applied to financial ser
ment test are recognised as an expense. Gains and losses vices business. Impairment losses (write-downs and
on available-for-sale financial assets are recognised di allowances) on receivables are always recorded on sepa
rectly in accumulated other equity until the financial as rate accounts and derecognised at the same time the
set is disposed of or is determined to be impaired, at corresponding receivables are derecognised.
which time the cumulative loss previously recognised in
other comprehensive income is reclassified to profit or Items are presented as financial assets to the extent that
loss for the period. they relate to financing transactions.
With the exception of derivative financial instruments, Derivative financial instruments are only used within the
all receivables and other current assets relate to loans BMW Group for hedging purposes in order to reduce cur
and receivables which are not held for trading. All such rency, interest rate, fair value and market price risks from
items are measured at amortised cost. Receivables with operating activities and related financing requirements.
maturities of over one year which bear no or a lower-
than-market interest rate are discounted. Appropriate All derivative financial instruments (such as interest, cur
impairment losses are recognised to take account of all rency and combined interest / currency swaps, forward
identifiable risks. currency and forward commodity contracts) are meas
ured in accordance with IAS 39 at their fair value, irre
Receivables from sales financing comprise receivables spective of their purpose or the intention for which they
from retail customer, dealer and lease financing. are held.
Impairment losses on receivables relating to financial ser If there are no quoted prices on active markets for de
vices business are recognised using a uniform method rivative financial instruments, credit risk is taken into
ology that is applied throughout the Group and meets account as an adjustment to the fair value of the finan
the requirements of IAS 39. This methodology results in cial instrument. The BMW Group applies the option of
the recognition of impairment losses both on individual measuring the credit risk for a group of financial assets
assets and on groups of assets. If there is objective evi and financial liabilities on the basis of its net exposure.
dence of impairment, the BMW Group recognises im Portfolio-based value adjustments to the individual
pairment losses on the basis of individual assets. Within financial assets and financial liabilities are allocated using
the retail customer business, the existence of overdue the relative fair value approach (net method).
106
Derivative financial instruments are measured using value. Manufacturing cost comprises all costs which
market information and recognised valuation tech are directly attributable to the manufacturing process
niques. In those cases where hedge accounting is ap and an appropriate proportion of production-related
plied, changes in fair value are recognised either in overheads. This includes production-related deprecia
profit or loss or in other comprehensive income as a tion and an appropriate proportion of administrative and
component of accumulated other equity, depending social costs.
on whether the transactions are classified as fair value
hedges or cash flow hedges. In the case of fair value Borrowing costs are not included in the acquisition or
hedges, the results of the fair value measurement of manufacturing cost of inventories.
the derivative financial instruments and the related
hedged items are recognised in the income statement. Cash and cash equivalents comprise mainly cash on hand
In the case of fair value changes in cash flow hedges and cash at bank with an original term of up to three
which are used to mitigate the future cash flow risk months.
on a recognised asset or liability or on forecast trans
actions, unrealised gains and losses on the hedging Assets held for sale and disposal groups held for sale
instrument are recognised initially directly in accumu are presented separately in the balance sheet in ac
lated other equity. Any such gains or losses are recog cordance with IFRS 5, if the carrying amount of the
nised subsequently in the income statement when the relevant assets will be recovered principally through a
hedged item (usually external revenue) is recognised sale transaction rather than through continuing use.
in the income statement. The portion of the gains or This situation only arises if the assets can be sold imme
losses from fair value measurement not relating to the diately in their present condition, the sale is expected
90 Income Statements hedged item is recognised immediately in the income to be completed within one year from the date of classi
90 Statement of statement. If, contrary to the normal case within the fication and the sale is highly probable. At the date of
92 Balance Sheets BMW Group, hedge accounting cannot be applied, the classification, property, plant and equipment, intangible
gains or losses from the fair value measurement of assets and disposal groups which are being held for
Equity derivative financial instruments are recognised imme sale are measured at the lower of their carrying amount
98 Notes
diately in the income statement. and their fair value less costs to sell and scheduled de
Policies preciation / amortisation ceases. This does not apply,
In accordance with IAS 12 (Income Taxes), deferred taxes however, to items within the disposal group which are
of Comprehensive Income are recognised on all temporary differences between not covered by the measurement rules contained in
149 Other Disclosures the tax and accounting bases of assets and liabilities and IFRS 5. Simultaneously, liabilities directly related to the
165 Segment Information on consolidation procedures. Deferred tax assets also sale are presented separately on the equity and liabili
include claims to future tax reductions which arise from ties side of the balance sheet as “Liabilities in conjunction
the expected usage of existing tax losses available for with assets held for sale”.
carryforward to the extent that future usage is probable.
Deferred taxes are computed using enacted or planned Provisions for pensions are recognised using the pro
tax rates which are expected to apply in the relevant jected unit credit method in accordance with IAS 19
national jurisdictions when the amounts are recovered. (Employee Benefits). Under this method, not only obli
gations relating to known vested benefits at the re
Inventories of raw materials, supplies and goods for re porting date are recognised, but also the effect of future
sale are stated at the lower of average acquisition cost increases in pensions and salaries. This involves taking
and net realisable value. account of various input factors which are evaluated
on a prudent basis. The calculation is based on an inde
Work in progress and finished goods are stated at the pendent actuarial valuation which takes into account
lower of average manufacturing cost and net realisable all relevant biometric factors.
Remeasurements of the net defined benefit liability period. Non-current provisions with a remaining period
for pension plans are recognised, net of deferred tax, of more than one year are discounted to the present
directly in equity (revenue reserves). value of the expenditures expected to settle the obligation
at the end of the reporting period.
Net interest expense on the net defined benefit liability
and / or net interest income on the net defined benefit Financial liabilities are measured on first-time recogni
asset are presented separately within the financial result. tion at cost which corresponds to the fair value of the
All other costs relating to allocations to pension pro consideration given. Transaction costs are also taken
visions are allocated to costs by function in the income into account except for financial liabilities allocated to
statement. the category “financial liabilities measured at fair value
through profit or loss”. Subsequent to initial recogni
Other provisions are recognised when the BMW Group tion, liabilities are – with the exception of derivative
has a present obligation (legal or constructive) arising financial instruments – measured at amortised cost
from past events, the settlement of which is probable using the effective interest method. The BMW Group
and when a reliable estimate can be made of the amount has no liabilities which are held for trading. Liabilities
of the obligation. Measurement of provisions is based from finance leases are stated at the present value of
on the best estimate of the expenditure required to the future lease payments and disclosed under other
settle the present obligation at the end of the reporting financial liabilities.
7 Assumptions, judgements and estimations

The preparation of the Group Financial Statements in portfolio, future market share developments, macro-
accordance with IFRSs requires management to make economic developments (such as currency, interest rate
certain assumptions and judgements and to use estima- and raw materials) as well as the legal environment and
tions that can affect the reported amounts of assets and past experience.
liabilities, revenues and expenses and contingent lia
bilities. Major items requiring assumptions and estima The BMW Group regularly checks the recoverability of
tions are described below. The assumptions used are its leased products. One of the main assumptions re
continuously checked for their validity. Actual amounts quired for leased products relates to their residual value
could differ from the assumptions and estimations used since this represents a significant portion of future cash
if business conditions develop differently to the Group’s inflows. In order to estimate the level of prices likely
expectations. to be achieved in the future, the BMW Group incorpo
rates internally available historical data, current market
Estimations are required to assess the recoverability of data and forecasts of external institutions into its cal
a cash-generating unit (CGU). If the recoverability of an culations. Internal back-testing is applied to validate the
asset is being tested at the level of a CGU, assumptions estimations made. Further information is provided in
must be made with regard to future cash inflows and out note 25.
flows, involving in particular an assessment of the fore
casting period to be used and of developments after that The bad debt risk relating to receivables from sales financ-
period. For the purposes of determining future cash ing is assessed regularly by the BMW Group. For these
inflows and outflows, management applies forecasting purposes, the main factors taken into consideration are
assumptions which are continually brought up to date past experience, current market data (such as the level
and regularly compared with external sources of in of financing business arrears), rating classes and
formation. The assumptions used take account in par scoring information. Further information is provided
ticular of expectations of the profitability of the product in note 28.
108
The calculation of deferred tax assets requires assump estimations also involve assessing the future level of
tions to be made with regard to the level of future tax otential repair costs and price increases per product
p
able income and the timing of recovery of deferred tax and market. Provisions for warranties are adjusted
assets. These assumptions take account of forecast oper regularly to take account of new circumstances and the
ating results and the impact on earnings of the reversal impact of any changes recognised in the income state
of taxable temporary differences. Since future business ment. Further information is provided in note 37.
developments cannot be predicted with certainty and to Similar estimates are also made in conjunction with the
some extent cannot be influenced by the BMW Group, measurement of expected reimbursement claims.
the measurement of deferred tax assets is subject to un
certainty. Further information is provided in note 17. In the event of involvement in legal proceedings or
when claims are brought against a Group entity, provi-
Current income taxes are computed throughout the sions for litigation and liability risks are recognised
BMW Group in accordance with tax legislation appli when an outflow of resources is probable and a reliable
cable in each relevant country. In situations where a estimate can be made of the amount of the obligation.
permissible element of discretion has been applied in Management is required to make assumptions with re
determining the amount of a tax exposure to be recog spect to the probability of occurrence, the amount in
nised in the financial statements, there is always a pos volved and the duration of the legal dispute. For these
sibility that local tax authorities may reach a different reasons, the recognition and measurement of provi
conclusion. sions for litigation and liability risks are subject to un
certainty. Further information is provided in note 37.
The calculation of pension provisions requires assump
90 Income Statements tions to be made with regard to discount factors, salary In addition, judgement is required in particular when
90 Statement of trends, employee fluctuation and the life expectancy assessing whether the risks and rewards incidental to
92 Balance Sheets of employees. As in previous years, discount factors are ownership of a leased asset have been transferred for
determined by reference to market yields at the end of the purposes of determining the classification of leasing
Equity the reporting period on high quality corporate bonds. arrangements.
98 Notes
The salary level trend refers to the expected rate of
Policies salary increase which is estimated annually depending Determining the scope of consolidated companies to
on inflation and the career development of employees be included in the Group Financial Statements may
of Comprehensive Income within the Group. Further information is provided in involve the use of judgement. In particular when the
149 Other Disclosures note 36. BMW Group holds 50 % or less of the voting rights, a
165 Segment Information detailed assessment must be made as to whether sole
Estimations are required for the purposes of recognis control, joint control or significant influence applies.
ing and measuring provisions for warranty obligations For instance, other contractual rights and / or other mat
(statutory, contractual and voluntary). In addition to ters and circumstances could result in the conclusion
statutorily prescribed manufacturer warranties, the that the BMW entity concerned controls or jointly con
BMW Group also offers various categories of warranty trols an entity in which it has a participation. In the
depending on the product and sales market concerned. latter case, it must then be decided whether the joint
Warranty provisions are recognised when the risks arrangement is a joint operation or a joint venture. In
and rewards of ownership of the goods are transferred making its judgement, the BMW Group must take all
to the dealer or retail customer or when a new category contractual arrangements and other circumstances into
of warranty is introduced. In order to determine the account, and not just the structure and legal form of
level of the provision, various factors are taken into the entity. A new assessment is made in the event of
consideration, including estimations based on past ex any indication of changes in the previous assessment of
perience with the nature and amount of claims. These (joint) control. Further information is provided in note 2.
8 New financial reporting rules

(a) Financial reporting rules applied for the first time in the financial year 2014
The following Standards, Revised Standards, Amendments and Interpretations were applied for the first time in
the financial year 2014:
Standard / Interpretation Date of Date of Date of Impact
issue by IASB mandatory mandatory on BMW Group
application application
IASB EU
IFRS 10 Consolidated Financial Statements 12. 5. 2011 1. 1. 2013 1. 1. 2014 Significant in principle
IFRS 11 Joint Arrangements 12. 5. 2011 1. 1. 2013 1. 1. 2014 Significant in principle
IFRS 12 Disclosure of Interest in Other Entities 12. 5. 2011 1. 1. 2013 1. 1. 2014 Significant in principle
Changes in Transitional Regulations 28. 6. 2012 1. 1. 2013 1. 1. 2014 Significant in principle

(IFRS 10, IFRS 11 and IFRS 12)
Investment Entities (Amendments to 31. 10. 2012 1. 1. 2014 1. 1. 2014 Insignificant

IFRS 10, IFRS 12 and IAS 27)
IAS 27 Separate Financial Statements 12. 5. 2011 1. 1. 2013 1. 1. 2014 None
IAS 28 Investments in Associates and 12. 5. 2011 1. 1. 2013 1. 1. 2014 None

Joint Ventures
IAS 32 Presentation – Offsetting of Financial Assets 16. 12. 2011 1. 1. 2014 1. 1. 2014 Insignificant

and Financial Liabilities
IAS 39 Novation of Derivatives and Continuation 27. 6. 2013 1. 1. 2014 1. 1. 2014 Insignificant

of Hedge Accounting
(Amendments to IAS 39)
Information regarding the introduction and impact of the consolidation-related Standards IFRS 10, IFRS 11 and
IFRS 12 is provided note 9.
(b) Financial reporting pronouncements issued by the IASB, but not yet applied
Standard / Interpretation Date of Date of Date of Expected impact

IASB EU
IFRS 9 Financial Instruments 12. 11. 2009 / 1. 1. 2018 No Significant in principle

28. 10. 2010 /
16. 12. 2011 /
19. 11. 2013 /
24. 7. 2014
IFRS 10 / Sale or Contribution of Assets between an 11. 9. 2014 1. 1. 2016 No Insignificant
IAS 28 Investor and an Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28)
IFRS 10 / Investment Entities: Applying the 18. 12. 2014 1. 1. 2016 No Insignificant

IFRS 12 / Consolidation Exception (Amendments to
IAS 28 IFRS 10, IFRS 12 and IAS 28)
IFRS 11 Acquisition of an Interest in a Joint Operation 6. 5. 2014 1. 1. 2016 No Insignificant

(Amendments to IFRS 11)
IFRS 14 Regulatory Deferral Accounts 30. 1. 2014 1. 1. 2016 No Insignificant
IFRS 15 Revenue from Contracts with Customers 28. 5. 2014 1. 1. 2017 No Significant in principle
110
Standard / Interpretation Date of Date of Date of Expected impact

IASB EU
IAS 1 Presentation of Financial Statements 18. 12. 2014 1. 1. 2016 No Significant in principle

(Initiative to Improve Disclosure Require-
ments – Amendments to IAS 1)
IAS 16 / Clarification of Acceptable Methods of 12. 5. 2014 1. 1. 2016 No Insignificant

IAS 38 Depreciation and Amortisation
(Amendments to IAS 16 and IAS 38)
IAS 16 / Agriculture: Bearer Plants 30. 6. 2014 1. 1. 2016 No None

IAS 41 (Amendments to IAS 16 and IAS 41)
IAS 19 Employment Benefits: 21. 11. 2013 1. 7. 2014 1. 2. 20151 Insignificant

Employee Contributions (Amendments to
IAS 19)
IAS 27 Equity Method in Separate Financial 12. 8. 2014 1. 1. 2016 No None

Statements (Amendments to IAS 27)
IFRIC 21 Levies 20. 5. 2013 1. 1. 2014 17. 6. 20142 Insignificant

1
Annual Improvements to IFRS 2010 – 2012 12. 12. 2013 1. 7. 2014 1. 2. 2015 Insignificant
90 GROUP FINANCIAL S TATEMENTS Annual Improvements to IFRS 2011 – 2013 1. 7. 2014 Insignificant
12. 12. 2013 1. 1. 2015
90 Statement of No Insignificant
Annual Improvements to IFRS 2012 – 2014 25. 9. 2014 1. 1. 2016
92 Balance Sheets
1
94 Cash Flow Statements Mandatory application in annual periods beginning on or after 1 February 2015.
2
96 Group Statement of Changes in Mandatory application in annual periods beginning on or after 17 June 2014.
Equity
98 Notes
In November 2009 the IASB issued IFRS 9 (Financial on 19 November 2013. On the one hand, the amend
Policies Instruments) as part of a project to revise the accounting ments overhaul the requirements for hedge accounting
for financial instruments. This Standard marks the by introducing a new hedge accounting model. They
of Comprehensive Income first of three phases of the IASB project to replace the also enable entities to change the accounting for lia
149 Other Disclosures existing IAS 39 (Financial Instruments: Recognition and bilities they have elected to measure at fair value, before
165 Segment Information Measurement). The first phase deals initially only with applying any other requirement in IFRS 9, such that fair
financial assets. IFRS 9 amends the recognition and value changes due to changes in “own credit risk” would
measurement requirements for financial assets, includ not require to be recognised in profit or loss. The man
ing various hybrid contracts. datory effective date of 1 January 2015 was removed and
a new application date of 1 January 2018 set. The impact
Financial assets are measured at either amortised cost of adoption of the Standard on the Group Financial
or fair value. IFRS 9 harmonises the various rules con Statements is currently being assessed.
tained in IAS 39 and reduces the number of valuation
categories for financial instruments on the assets side In May 2014 the IASB issued IFRS 15 (Revenue from
of the balance sheet. Contracts with Customers) together with the Financial
Accounting Standards Board. The objective of the new
The new categorisation is based partly on the entity’s Standard is to assimilate all the various existing require
business model and partly on the contractual cash flow ments and Interpretations relating to revenue recogni
characteristics. tion (IAS 11 Construction Contracts, IAS 18 Revenue,
IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agree
In October 2010, additional rules for financial liabilities ments for the Construction of Real Estate, IFRIC 18
were added to IFRS 9. The requirements for financial Transfers of Assets from Customers, SIC-31 Revenue –
liabilities contained in IAS 39 remain unchanged with Barter Transactions involving Advertising Services) in a
the exception of new requirements relating to the single Standard. The new Standard also stipulates uni
measurement of an entity’s own credit risk at fair value. form revenue recognition principles for all sectors and
A package of amendments to IFRS 9 was announced all categories.
The new Standard is based on a five-step model, which of the new requirements on the Group Financial State
sets out the rules for revenue from contracts with cus ments is currently being assessed.
tomers, with the exception – among other things – of
lease arrangements, insurance contracts, financial in In December 2014, the IASB issued Amendments to
struments and specified contractual rights and obliga IAS 1 as part of its disclosure initiative. The amend
tions relating to non-monetary transactions between ments relate primarily to clarifications relating to the
entities within the same sector. Revenue can be recog presentation of financial reports.
nised either over time or at a specific point in time. The
five-step model describes the five steps necessary to Firstly, disclosures are only required to be made in the
recognise revenue on the basis of the transfer of control: notes if their inclusion is material for users of the
1. Identify the contract with the customer financial statements. This also applies when an IFRS
2. Identify the performance obligations in the contract Standard explicitly specifies a minimum list of disclo
3. Determine the transaction price sures. Secondly, items to be presented in the balance
4. Allocate the transaction price to separate performance sheet, income statement and comprehensive income
obligations can be aggregated or disaggregated by using subtotals.
5. Recognise revenue when a performance obligation is Thirdly, it clarifies that an entity’s share of other com
satisfied. prehensive income of equity-accounted entities is re
quired to be analysed – within the Statement of Com
In the case of multi-component transactions or trans prehensive Income – to show “components, which
actions with variable consideration, it is possible that will be subsequently reclassified to profit and loss” and
revenue may have to be recognised earlier or later un “components, which will be not subsequently reclassi
der IFRS 15 compared with the previous Standard. fied to profit and loss”. Fourthly, it is stressed that there
is no standard template for the notes and that the em
A major difference to the previous Standard is the in phasis should be on structuring the notes based on the
creased scope of discretion for estimates and the intro relevance for the specific reporting entity.
duction of thresholds that could influence the amount
and timing of revenue recognition. The Standard is mandatory for the first time for annual
periods beginning on or after 1 January 2016. Early
The Standard is mandatory for the first time for annual adoption is permitted. The potential impact of adoption
periods beginning on or after 1 January 2017. Early of the new requirements on the Group Financial State
adoption is permitted under IFRS. The impact of adoption ments is currently being assessed.
9 Adjustments in accordance with IAS 8 IFRS 10 introduces a uniform consolidation model which
Adjustments as a result of consolidation-related Standards establishes control as the basis for consolidation – con
In May 2011, the IASB issued three new Standards – trol of a subsidiary entity by a parent entity – and which
IFRS 10 (Consolidated Financial Statements), IFRS 11 can be applied to all entities. The control concept must
(Joint Arrangements), IFRS 12 (Disclosure of Interests therefore be applied both to parent-subsidiary relation
in Other Entities) – as well as amendments to IAS 27 ships based on voting rights as well as to parent-sub
(Separate Financial Statements) and to IAS 28 (Invest sidiary relationships arising from other contractual ar
ments in Associates and Joint Ventures), all relating rangements. Under the control concept established in
to accounting for business combinations. The three new IFRS 10, an investor controls another entity when it is
Standards, which were endorsed by the EU in Decem exposed to or has rights to variable returns from its in
ber 2012, are mandatory for the first time for annual volvement with the investee and has the ability to affect
periods beginning on or after 1 January 2014 and are re those returns through its power over the investee.
quired to be applied retrospectively.
IFRS 11 supersedes IAS 31 (Interests in Joint Ventures)
IFRS 10 replaces the consolidation guidelines contained and SIC-13 (Jointly Controlled Entities – Non-Monetary
in IAS 27 and SIC-12 (Consolidation – Special Purpose Contributions by Venturers). This Standard sets out the
Entities). The requirements for separate financial state requirements for accounting for joint arrangements and
ments remain unchanged in the revised version of places the emphasis on the rights and obligations that
IAS 27. arise from such arrangements. IFRS 11 distinguishes
112
between two types of joint arrangements, namely joint In accordance with IAS 8.14, the resulting adjustments
operations and joint ventures, and therefore results in relating to the financial year 2013 are presented in the
a change in the classification of joint arrangements. A tables at the end of this section. The transition require
joint operation is a joint arrangement whereby the par ments contained in these new Standards were com
ties that have joint control of the arrangement have plied with and, accordingly, the impact on the Group’s
rights to the assets, and obligations for the liabilities, re Balance Sheet, Income Statement and Cash Flow State
lating to the arrangement. A joint venture is a joint ar ment is not presented separately for the financial year
rangement whereby the parties that have joint control 2014.
of the arrangement have rights to the net assets result
ing from the arrangement. IFRS 11 requires joint opera Restatement of income taxes in conjunction with leased
tors to account for their share of assets and liabilities in products in the USA
the joint operation (and their share of income and ex In previous years, there had been a misallocation between
penses). Joint venturers are required to account for their current and deferred income taxes for leased products
investment using the equity method. The withdrawal in the USA. The figures have been restated in accordance
of IAS 31 means the removal of the option to account with IAS 8.41 et seq., involving a reclassification from
for joint ventures using either the proportionate consoli deferred tax liabilities to current tax payables. The re
dation or the equity method. The equity method must lated interest and penalty charges up to 31 December
be applied in accordance with amended IAS 28. 2012 were recorded directly in equity (in revenue re
serves). Interest relating to the financial year 2013 is
IFRS 12 sets out the requirements for disclosures relating reported as an expense for that period (in financial
to all types of interests in other entities, including joint result).
90 Income Statements arrangements, associated companies, structured entities
90 Statement of and unconsolidated entities. Prior year figures in the Balance Sheet, Income State
92 Balance Sheets ment, Statement of Comprehensive Income, Statement
Application of IFRS 10 has no impact on the scope of of Changes in Equity, Cash Flow Statement and Notes
Equity entities included in the Group Financial Statements. to the Group Financial Statements have been restated
98 Notes
The removal of the option for accounting for joint ven retrospectively. The restatements also impacted the
Policies tures (as stipulated by IFRS 11) does not have any im figures reported for the Financial Services and Other
pact since the BMW Group already accounted for joint Entities segments. The Financial Service’s segment re
of Comprehensive Income ventures using the equity method. By contrast, the sult for 2013 was reduced by € 20 million and amounted
149 Other Disclosures classification of joint arrangements in accordance with to € 1,619 million after restatement, while segment as
165 Segment Information IFRS 11 has changed. The investments in SGL Automo sets were reduced by € 19 million to € 8,388 million. Seg
tive Carbon Fibers GmbH & Co. KG, Munich, SGL ment assets reported for the Other Entities segment
Automotive Carbon Fibers Verwaltungs GmbH, Munich, amounted to € 55,300 million at the end of the financial
and SGL Automotive Carbon Fibers LLC, Dover, DE – year 2013, correcting the previously reported amount
previously accounted for at equity – have been classi by € 1,050 million. The tables at the end of this section
fied with effect from the first quarter of the financial show the impact for the Group.
year 2014 as joint operations and consolidated propor
tionately on the basis of the BMW Group’s 49 % share Change in presentation of term deposits within the Cash
holding. This change in classification reflects the fact Flow Statement
that the arrangement is primarily designed to provide The BMW Group uses a broad range of instruments on
the joint operators with an output (i. e. production) as international capital markets to manage its liquidity.
well as the fact that settlement of the liabilities relating Due to the situation on the financial markets, the BMW
to the activities conducted through the arrangement Group is increasingly investing in term deposits with
depends on both parties on a continuous basis. Appli longer terms (i. e. money deposits that mature after more
cation of IFRS 12 impacts the scope of disclosures than three months). Term deposits were previously re
required to be made in the notes to the BMW Group ported in the Cash Flow Statement on the line “Change
Financial Statements, in particular the requirement to in other operating assets and liabilities” within operating
disclose more detailed financial information with re cash flows. Since the payments related to these money
spect to significant joint ventures. Further details can be deposits qualify as instruments pursuant to IAS 7.16 c – d,
found in note 26. they are required to be presented as cash flows from
investing activities. In accordance with IAS 8.41 et seq.,
The new requirements pertaining to IFRS 10, IFRS 11 these amounts have been reclassified to the line items
and IFRS 12 are required to be applied retrospectively. “Investments in marketable securities and term deposits”
and “Proceeds from the sale of marketable securities and in the previous year increased by € 500 million, whereas
from matured term deposits”. As a result of the reclassi the net cash outflow for investing activities was in
fication, the net cash inflow from operating activities creased by the same amount.
Changes in Group Balance Sheet presentation
1 January 2013 As originally Adjustments in Restatements in As reported

in € million reported accordance with accordance with
IAS 8.14 IAS 8.41 et seq.
Total assets 131,835 4 – 131,839
Total non-current assets 81,305 – 7 – 81,298

thereof property, plant and equipment 13,341 35 – 13,376
thereof investments accounted for using the equity method 514 – 9 – 505
thereof non-current other assets 803 – 33 – 770
Total current assets 50,530 11 – 50,541
thereof inventories 9,725 7 – 9,732
thereof cash and cash equivalents 8,370 4 – 8,374
Total equity 30,606 – – 34 30,572

thereof equity attributable to shareholders of BMW AG 30,499 – – 34 30,465
thereof revenue reserves 28,544 – – 34 28,510
Total non-current provisions and liabilities 52,834 – – 947 51,887
thereof other provisions 3,441 – 40 3,481
thereof deferred tax 3,081 – – 987 2,094
Total current provisions and liabilities 48,395 4 981 49,380
thereof current tax 1,482 – 981 2,463
thereof trade payables 6,433 4 – 6,437
31 December 2013 As originally Adjustments in Restatements in As reported

Total assets 138,368 9 – 138,377
Total non-current assets 86,194 – 1 – 86,193

thereof property, plant and equipment 15,113 55 – 15,168
thereof investments accounted for using the equity method 652 – 14 – 638
thereof non-current other assets 954 – 42 – 912
Total current assets 52,174 10 – 52,184
thereof inventories 9,585 10 – 9,595
thereof current other assets 4,265 – 7 – 4,258
thereof cash and cash equivalents 7,664 7 – 7,671
Total equity 35,643 – – 43 35,600

thereof equity attributable to shareholders of BMW AG 35,455 – – 43 35,412
thereof revenue reserves 33,167 – – 45 33,122
thereof accumulated other equity – 358 – 2 – 356
Total non-current provisions and liabilities 52,682 – – 1,039 51,643
thereof other provisions 3,772 – 56 3,828
thereof deferred tax 3,554 – – 1,095 2,459
Total current provisions and liabilities 50,043 9 1,082 51,134
thereof other provisions 3,411 1 – 3,412
thereof current tax 1,237 – 1,082 2,319
thereof trade payables 7,475 10 – 7,485
thereof other liabilities 7,066 – 2 – 7,064
114
Changes in Group Income Statement presentation
2013 As originally Adjustments in Restatements in As reported

Revenues 76,058 1 – 76,059

Cost of sales – 60,784 – 7 – – 60,791
Gross profit 15,274 – 6 – 15,268
Selling and administrative expenses – 7,255 – 2 – – 7,257
Other operating income 841 1 – 842
Other operating expenses – 874 – 1 – – 875
Profit / loss before financial result 7,986 – 8 – 7,978
Result from equity accounted investments 398 9 – 407
Interest and similar income 184 – 1 – 183
Interest and similar expenses – 449 – – 20 – 469
Financial result – 73 8 – 20 – 85
Profit / loss before tax 7,913 – – 20 7,893
Income taxes – 2,573 – 9 – 2,564
Net profit 5,340 – – 11 5,329
Attributable to shareholders of BMW AG 5,314 – – 11 5,303
Basic earnings per share of common stock in € 8.10 – – 0.02 8.08
Basic earnings per share of preferred stock in € 8.12 – – 0.02 8.10
90 Statement of Diluted earnings per share of common stock in € 8.10 – – 0.02 8.08
Diluted earnings per share of preferred stock in € 8.12 – – 0.02 8.10
92 Balance Sheets
Equity
98 Notes
Policies Changes in presentation of the Statement of Comprehensive Income
123 Notes to the Statement 2013 As originally Restatements in As reported
of Comprehensive Income in € million reported accordance with
124 Notes to the Balance Sheet IAS 8.41 et seq.
Net profit 5,340 – 11 5,329
Currency translation foreign operations – 635 2 – 633
Items expected to be reclassified to the income statement
in the future 316 2 318
Other comprehensive income for the period after tax 1,252 2 1,254
Total comprehensive income 6,592 – 9 6,583
Total comprehensive income attributable to shareholders of BMW AG 6,566 – 9 6,557
Changes in Group Cash Flow Statement presentation
2013 As originally Adjustments in Restatements in As reported

in € million reported accordance with accordance
IAS 8.14 with IAS 8.41 et seq.
USA Term
deposits
Cash inflow from operating activities 3,614 13 – 500 4,127

Net profit 5,340 – – 11 – 5,329
Current tax 2,435 – 146 – 2,581
Other interest and similar income / expenses 126 1 20 – 147
Depreciation and amortisation of other tangible, intangible
and investment assets 3,830 2 – – 3,832
Change in provisions 479 1 – – 480
Change in deferred taxes 138 – – 155 – – 17
Other non-cash income and expense items – 551 – 1 – – – 552
Gain / loss on disposal of tangible and intangible assets
and marketable securities – 22 1 – – – 21
Result from equity accounted investments – 398 – 9 – – – 407
Changes in working capital 983 3 – – 986
Change in inventories – 192 – 3 – – – 195
Change in trade payables 1,153 6 – – 1,159
Change in other operating assets and liabilities 453 16 – 500 969
Interest received 137 – 1 – – 136
Cash outflow from investing activities – 6,981 – 10 – – 500 – 7,491
Investment in intangible assets and property, plant and equipment – 6,669 – 24 – – – 6,693
Expenditure for investments – 90 14 – – – 76
Investments in marketable securities and time deposits – 3,631 – – – 500 – 4,131
Change in cash and cash equivalents – 706 3 – – – 703
Cash and cash equivalents as at 1 January 8,370 4 – – 8,374
Cash and cash equivalents as at 31 December 7,664 7 – – 7,671
116
BMW Group
Notes to the Income Statement
10 Revenues
Revenues by activity comprise the following:
in € million 2014 2013*
Sales of products and related goods 60,280 56,812

Income from lease instalments 7,748 7,296
Sale of products previously leased to customers 6,716 6,412
Interest income on loan financing 2,881 2,868
Other income 2,776 2,671
Revenues 80,401 76,059
*
An analysis of revenues by business segment and geographical region is shown in the segment information in
note 50.
11 Cost of sales
Cost of sales comprises:
in € million 2014 2013*
Manufacturing costs 38,253 36,578
90 Statement of
Comprehensive Income Research and development expenses 4,135 4,118
92 Balance Sheets
Warranty expenditure 1,451 1,243
96 Group Statement of Changes in Cost of sales directly attributable to financial services 14,716 14,044
Equity
98 Notes Interest expense relating to financial services business 1,407 1,483
98 Accounting Principles and Expense for risk provisions and write-downs for financial services business 362 435
Policies
116 Notes to the Income Statement Other cost of sales 3,072 2,890
123 Notes to the Statement Cost of sales 63,396 60,791
*
149 Other Disclosures Prior year figures have been adjusted in accordance with IAS 8, see note 9.
Group cost of sales include € 16,485 million ( 2013 : on assets and reduced consumption-based taxes amount
€ 15,962 million) relating to Financial Services business. ing to € 54 million (2013: € 45 million).
As in the previous year, manufacturing costs do not con Total research and development expenditure comprises
tain any impairment losses on intangible assets and research costs, non-capitalised development costs and
property, plant and equipment. Cost of sales is reduced capitalised development costs (excluding scheduled
by public-sector subsidies in the form of reduced taxes amortisation). Total research and development expendi
ture was as follows:
in € million 2014 2013*
Research and development expenses 4,135 4,118

Amortisation – 1,068 – 1,069
New expenditure for capitalised development costs 1,499 1,744
Total research and development expenditure 4,566 4,793
*
12 Selling and administrative expenses Administrative expenses amounted to € 2,548 million

Selling expenses amounted to € 5,344 million (2013*: (2013*: € 2,371 million) and comprise expenses for ad
€ 4,886 million) and comprise mainly marketing, adver ministration not attributable to development, produc
tising and sales personnel costs. tion or sales functions.
*
13 Other operating income and expenses
in € million 2014 2013*
Exchange gains 311 346

Income from the reversal of provisions 184 183
Income from the reversal of impairment losses and write-downs 30 13
Gains on the disposal of assets 101 53
Sundry operating income 251 247
Other operating income 877 842
Exchange losses – 334 – 324

Expense for additions to provisions – 225 – 265
Expense for impairment losses and write-downs – 86 – 37
Losses on the disposal of assets – 25 – 27
Sundry operating expenses – 202 – 222
Other operating expenses – 872 – 875
Other operating income and expenses 5 – 33
*
14 Result from equity accounted investments marily the Group’s share of the result of the joint
The profit from equity accounted investments amounted venture, BMW Brilliance Automotive Ltd., Shenyang.
to € 655 million (2013*: € 407 million) and includes pri *
15 Net interest result
in € million 2014 2013*
Other interest and similar income 200 183

thereof from subsidiaries: € 18 million (2013*: € 17 million)
Interest and similar income 200 183
Net interest expense on the net defined benefit liability for pension plans – 88 – 127
Expense relating to interest impact on other long-term provisions – 105 – 5
Write-downs on current marketable securities – – 7
Other interest and similar expenses – 326 – 330
thereof to subsidiaries: € – 6 million (2013: € – 6 million)
Interest and similar expenses – 519 – 469
Net interest result – 319 – 286
*
118
16 Other financial result
in € million 2014 2013
Income from investments in subsidiaries and participations 3 12

thereof from subsidiaries: € 2 million (2013: € 8 million)
Impairment losses on investments in subsidiaries and participations – 153 – 91
Expenses from investments in subsidiaries – – 2
Result on investments – 150 – 81
Losses and gains relating to financial instruments – 597 – 125

Sundry other financial result – 597 – 125
Other financial result – 747 – 206
The result from investments in 2014 was negatively The deterioration in other financial result was primarily
i mpacted by an impairment loss on other investments due to the negative impact of currency and commodity
amounting to € 152 million (2013: € 73 million). derivatives.
17 Income taxes
90 Income Statements Taxes on income comprise the following:
90 Statement of
Comprehensive Income in € million 2014 2013*
92 Balance Sheets
96 Group Statement of Changes in Current tax expense 2,774 2,581
Equity
98 Notes Deferred tax expense / income 116 – 17
98 Accounting Principles and Income taxes 2,890 2,564
Policies
*
123 Notes to the Statement Prior year figures have been adjusted in accordance with IAS 8, see note 9.
149 Other Disclosures Current tax expense includes € 275 million (2013: € 222 mil surcharge of 5.5 % applies in Germany, giving a tax rate
165 Segment Information lion) relating to prior periods. of 15.8 %, unchanged from the previous year. After taking
account of an average municipal trade tax multiplier
A deferred tax expense of € 83 million (2013*: income of rate (Hebesatz) of 425.0 % (2013: 420.0 %), the municipal
€ 42 million) is attributable to new temporary differences trade tax rate for German entities is 14.9 % (2013: 14.7 %).
and the reversal of temporary differences brought for The overall income tax rate in Germany is therefore
ward. 30.7 % (2013: 30.5 %). Deferred taxes for non-German
entities are calculated on the basis of the relevant country-
The tax expense was reduced by € 27 million (2013: € 5 mil specific tax rates and remained in a range of between
lion) as a result of utilising tax losses / tax credits brought 12.5 % and 46.9 % once again in the financial year 2014.
forward, for which deferred assets had not previously Changes in tax rates resulted in a deferred tax expense
been recognised. of € 22 million (2013: € 2 million).
The change in the valuation allowance on deferred tax The actual tax expense for the financial year 2014 of
assets relating to tax losses available for carryforward € 2,890 million (2013*: € 2,564 million) is € 217 million
and temporary differences resulted in a tax expense of (2013*: € 157 million) higher than the expected tax ex
€ 49 million (2013: € 7 million). pense of € 2,673 million (2013*: € 2,407 million) which
would theoretically arise if the tax rate of 30.7 % (2013:
Deferred taxes are computed using enacted or planned 30.5 %), applicable for German companies, was applied
tax rates which are expected to apply in the relevant across the Group.
national jurisdictions when the amounts are recovered.
A uniform corporation tax rate of 15.0 % plus solidarity *
The difference between the expected and actual tax expense is explained in the following reconciliation:
in € million 2014 2013*
Profit before tax 8,707 7,893

Tax rate applicable in Germany 30.7 % 30.5 %
Expected tax expense 2,673 2,407
Variances due to different tax rates – 55 – 134

Tax increases (+) / tax reductions (–) as a result of non-deductible expenses and tax-exempt income 150 164
Tax expense (+) / benefits (–) for prior years 275 222
Other variances – 153 – 95
Actual tax expense 2,890 2,564
Effective tax rate 33.2 % 32.5 %
*
Tax increases as a result of non-deductible expenses The line “Other variances” comprises primarily recon
and tax reductions due to tax-exempt income remained ciling items relating to the Group’s share of results of
more or less at a similar level to the previous year. As equity accounted investments.
in the previous year, tax increases as a result of non-tax-
deductible expenses were attributable primarily to the The allocation of deferred tax assets and liabilities to
impact of non-recoverable withholding taxes and trans balance sheet line items at 31 December is shown in the
fer price issues. following table:
Deferred tax assets Deferred tax liabilities
in € million 2014 2013 * 2014 2013 *
Intangible assets 11 9 1,706 1,571

Property, plant and equipment 50 26 400 264
Leased products 393 436 5,486 4,498
Investments 5 6 12 5
Other assets 1,289 1,078 2,687 3,747
Tax loss carryforwards 566 512 – –
Provisions 4,175 3,220 95 47
Liabilities 2,827 2,955 602 449
Eliminations 2,945 2,570 690 661
12,261 10,812 11,678 11,242
Valuation allowance – 496 – 409 – –

Netting – 9,704 – 8,783 – 9,704 – 8,783
Deferred taxes 2,061 1,620 1,974 2,459
Net 87 839
*
Deferred tax assets on tax loss carryforwards and capi (2013*: € 402 million). This includes an amount of € 228 mil
tal losses before allowances totalled € 566 million (2013*: lion (2013: € 42 million), for which a valuation allowance
€ 512 million). After valuation allowances of € 496 mil of € 74 million (2013: € 14 million) was recognised on
lion (2013: € 409 million), their carrying amount stood at the related deferred tax asset. For entities with tax losses
€ 70 million (2013*: € 103 million). available for carryforward, a net surplus of deferred
tax assets over deferred tax liabilities is reported at
Tax losses available for carryforward – for the most part
usable without restriction – amounted to € 469 million *
120
31 December 2014 amounting to € 140 million (2013: Netting relates to the offset of deferred tax assets and
€ 192 million). Deferred tax assets are recognised on liabilities within individual separate entities or tax
the basis of management’s assessment of whether it is groups to the extent that they relate to the same tax
probable that the relevant entities will generate suffi authorities.
cient f uture taxable profits, against which deductible
temporary differences can be offset. Deferred taxes recognised directly in equity amounted
to € 1,889 million (2013: € 451 million), an increase of
Capital losses available for carryforward in the United € 1,438 million (2013: decrease of € 771 million) com
Kingdom which do not relate to ongoing operations in pared to the previous year. The change includes an
creased to € 2,112 million due to exchange rate factors increase in deferred taxes recognised in conjunction
(2013: € 1,975 million). As in previous years, deferred with currency translation amounting to € 9 million
tax assets recognised on these tax losses – amounting to (2013: reduction of € 1 million).
€ 422 million at the end of the reporting period (2013:
€ 395 million) – were fully written down since they can Changes in deferred tax assets and liabilities during the
only be utilised against future capital gains. reporting period can be summarised as follows:
in € million 2014 2013*
Deferred taxes at 1 January (assets (–) / liabilities (+)) 839 128

Deferred tax expense (+) / income (–) recognised through income statement 116 – 17
Change in deferred taxes recognised directly in equity – 1,429 770
90 GROUP FINANCIAL S TATEMENTS Exchange rate impact and other changes 387 – 42
Deferred taxes at 31 December (assets (–) / liabilities (+)) – 87 839
90 Statement of
92 Balance Sheets *
Equity Changes in deferred taxes include changes relating to Deferred taxes are not recognised on retained profits
98 Notes
items recognised either through the income statement of € 30.7 billion (2013: € 28.0 billion) of foreign subsidi
Policies or directly in equity as well as the impact of exchange aries, as it is intended to invest these profits to maintain
rate fluctuations, first-time consolidations and decon and expand the business volume of the relevant com
of Comprehensive Income solidations. Deferred taxes recognised directly in equity panies. A computation was not made of the potential im
149 Other Disclosures increased in total by € 1,429 million (2013: decrease of pact of income taxes on the grounds of disproportionate
165 Segment Information € 770 million). Of this amount, € 759 million (2013: expense.
€ 421 million) related to the fair value measurement of
derivative financial instruments and marketable securi The tax returns of BMW Group entities are checked reg
ties (recognised directly in equity), shown in the sum ularly by German and foreign tax authorities. Taking ac
mary above in the line items “Other assets” and “Liabili count of a variety of factors – including existing interpre
ties”. A further € 670 million (2013: decrease of € 349 mil tations, commentaries and legal decisions taken relating
lion) related to the remeasurements of the net defined to the various tax jurisdictions and the BMW Group’s
benefit liability for pension plans, shown in the sum past experience – adequate provision has, as far as identi
mary above in the line item “Provisions”. fiable, been made for potential future tax obligations.
18 Earnings per share
2014 2013*
Net profit for the year after minority interest € million 5,798.1 5,302.8
Profit attributable to common stock € million 5,317.7 4,865.3

Profit attributable to preferred stock € million 480.4 437.5
Average number of common stock shares in circulation number 601,995,196 601,995,196

Average number of preferred stock shares in circulation number 54,259,767 53,993,635
Basic earnings per share of common stock € 8.83 8.08

Basic earnings per share of preferred stock € 8.85 8.10
Dividend per share of common stock € 2.90 2.60

Dividend per share of preferred stock € 2.92 2.62
*
Basic earnings per share of preferred stock are com vant financial years. As in the previous year, diluted
puted on the basis of the number of preferred stock earnings per share correspond to basic earnings per
shares entitled to receive a dividend in each of the rele share.
19 Other disclosures relating to the income statement

Personnel expenses
The income statement includes personnel expenses as follows:
in € million 2014 2013*
Wages and salaries 8,094 7,401

Social security, retirement and welfare costs 1,670 1,591
thereof pension costs: € 991 million (2013: € 958 million)
Personnel expenses 9,764 8,992
*
Personnel expenses include € 42 million (2013: € 48 mil The average number of employees during the year
lion) of expenditure incurred to adjust the workforce size. was:
2014 2013*
Employees 105,743 100,057

thereof 186 (2013: 96) at proportionately-consolidated entities
Apprentices and students gaining work experience 7,560 7,165
thereof 2 (2013: 3) at proportionately-consolidated entities
Average number of employees 113,303 107,222
*
The number of employees at the end of the reporting period is disclosed in the Combined Management Report.
122
Fee expense
The fee expense pursuant to § 314 (1) no. 9 HGB recog amounted to € 23 million (2013: € 26 million) and consists
nised in the financial year 2014 for the Group auditors of the following:
Audit of financial statements 15 14

thereof KPMG AG Wirtschaftsprüfungsgesellschaft 3 3
Other attestation services 2 3
Tax advisory services 4 7
Other services 2 2
Fee expense 23 26
The total fee comprises expenses recorded by BMW AG, Government grants and government assistance
Munich, and all consolidated subsidiaries. Income from asset-related and performance-related
grants, amounting to € 30 million (2013*: € 25 million)
The fee expense shown for KPMG AG Wirtschaftsprü and € 73 million (2013: € 73 million) respectively, were
90 Income Statements fungsgesellschaft, Berlin, relates only to services pro recognised in the income statement in 2014.
90 Statement of vided on behalf of BMW AG, Munich, and its German
92 Balance Sheets subsidiaries. *
Equity
98 Notes
20 Share-based remuneration separate custodian account for each member concerned
Policies The BMW Group operates three share-based remunera (annual tranche). Each annual tranche is subject to a
tion schemes, namely the Employee Share Programme holding period of four years (vesting period). Once the
of Comprehensive Income (for entitled employees), share-based commitments to holding period is fulfilled, BMW AG grants one addi
149 Other Disclosures members of the Board of Management and share-based tional share of BMW AG common stock for each three
165 Segment Information commitments to senior heads of department. held or, at its discretion, pays the equivalent amount in
cash (share-based remuneration component) provided
In the case of the Employee Share Programme, non-vot that the term of office has not been terminated before
ing shares of preferred stock in BMW AG were granted the end of the agreed contract period (except in the case
to qualifying employees during the financial year 2014 of death or invalidity).
at favourable conditions (see note 35 for the number
and price of issued shares). The holding period for these With effect from the financial year 2012, qualifying de
shares is up to 31 December 2017. The BMW Group re partment heads are also entitled to opt for a share-based
corded a personnel expense of € 6 million (2013: € 5 mil remuneration component, which, in most respects, is
lion) for the Employee Share Programme in 2014, cor comparable to the share-based remuneration arrange
responding to the difference between the market price ments for Board of Management members.
and the reduced price of the shares of preferred stock
purchased by employees. The Board of Management re The share-based remuneration component is measured
serves the right to decide anew each year with respect at its fair value at each balance sheet date between grant
to an Employee Share Programme. and settlement date, and on the settlement date itself.
The appropriate amounts are recognised as personnel
For financial years beginning after 1 January 2011, expense on a straight-line basis over the vesting period
BMW AG has added a share-based remuneration com and reported in the balance sheet as a provision.
ponent to the existing compensation system for Board
of Management members. The cash-settlement obligation for the share-based re
muneration component is measured at its fair value at
Each Board of Management member is required to the balance sheet date (based on the closing price of
invest 20 % of his / her total bonus (after tax) in shares BMW AG common stock in Xetra trading at 31 Decem
of BMW AG common stock, which are recorded in a ber 2014).
BMW Group
Notes to the Statement of Comprehensive Income
The total carrying amount of the provision for the share- grant of the share-based remuneration components
based remuneration component of eligible current and was € 1,479,939 (2013: € 1,453,500), based on a total of
former Board of Management members and depart 17,712 shares (2013: 19,196 shares) of BMW AG com
ment heads at 31 December 2014 was € 3,096,674 (2013: mon stock or a corresponding cash-based settlement
€ 1,647,188). measured at the relevant market share price prevailing
on the grant date.
The total expense recognised in 2014 for the share-based
remuneration component of eligible current and former Further details on the remuneration of the Board of
Board of Management members and department heads Management are provided in the 2014 Compensation
was € 1,449,486 (2013: € 989,912). Report, which is part of the Combined Management
R
eport.
The fair value of the programmes for Board of Manage
ment members and department heads at the date of
21 Disclosures relating to total comprehensive income

Other comprehensive income for the period after tax comprises the following:
in € million 2014 2013*
Remeasurement of the net defined benefit liability for pension plans – 2,298 1,308
Items not expected to be reclassified to the income statement in the future – 1,592 936
Available-for-sale securities 40 8

thereof gains / losses arising in the period under report 109 48
thereof reclassifications to the income statement – 69 – 40
Financial instruments used for hedging purposes – 2,194 1,357
thereof gains / losses arising in the period under report – 1,939 1,536
thereof reclassifications to the income statement – 255 – 179
Other comprehensive income from equity accounted investments – 48 – 7
Currency translation foreign operations 764 – 633
Items expected to be reclassified to the income statement in the future – 706 318
Other comprehensive income for the period after tax – 2,298 1,254
*
Deferred taxes on components of other comprehensive income are as follows:

in € million 2014 2013*
Before Deferred After Before Deferred After
tax taxes tax tax taxes tax
Remeasurement of the net defined benefit liability for pension plans – 2,298 706 – 1,592 1,308 – 372 936
Available-for-sale securities 40 – 34 6 8 19 27
Financial instruments used for hedging purposes – 2,194 719 – 1,475 1,357 – 425 932
Other comprehensive income from equity accounted investments – 48 47 – 1 – 7 – 1 – 8
Currency translation foreign operations 764 – 764 – 633 – – 633
Other comprehensive income – 3,736 1,438 – 2,298 2,033 – 779 1,254
*
Other comprehensive income arising at the level of (2013: negative amount of € 10 million) and within
equity accounted investments is reported in the “Derivative financial instruments” with a negative
Statement of Changes in Equity within “Translation amount of € 141 million (2013: positive amount of
differences” with a positive amount of € 140 million € 2 million).
124
BMW Group
Notes to the Balance Sheet
22 Analysis of changes in Group tangible, intangible and investment assets 2014

Acquisition and manufacturing cost
in € million 1. 1. 2014 1 Translation Additions Reclassi- Disposals 31. 12.
differences fications 2014
Development costs 9,667 – 1,499 – 1,825 9,341

Goodwill 374 – – – 5 369
Other intangible assets 1,459 15 62 – 93 1,443
Intangible assets 11,500 15 1,561 – 1,923 11,153
Land, titles to land, buildings, including buildings on

third party land 8,812 207 407 428 51 9,803
Plant and machinery 28,843 607 2,436 2,023 1,145 32,764
Other facilities, factory and office equipment 2,355 65 207 32 149 2,510
Advance payments made and construction in progress 2,972 37 1,489 – 2,483 1 2,014
Property, plant and equipment 42,982 916 4,539 – 1,346 47,091
Leased products 32,486 1,954 14,576 – 12,047 36,969
Investments accounted for using the equity method 638 – 600 – 150 1,088
Investments in non-consolidated subsidiaries 240 2 41 – 57 226

Participations 575 – 66 – – 641
90 Statement of Non-current marketable securities – – – – – –
92 Balance Sheets Other investments 815 2 107 – 57 867
96 Group Statement of Changes in 1
Including first-time consolidations.
Equity 2
P
98 Notes 3
Including assets under construction of € 1,679 million.
Policies
123 Notes to the Statement Analysis of changes in Group tangible, intangible and investment assets 20131
Acquisition and manufacturing cost
149 Other Disclosures in € million 1. 1. 2013 2 Adjust- Translation Additions Reclassi- Disposals 31. 12.
3
165 Segment Information ment differences fications 2013
Development costs 8,488 – – 1,744 – 565 9,667

Goodwill 374 – – – – – 374
Other intangible assets 1,008 – – 6 473 – 22 1,453
Intangible assets 9,870 – – 6 2,217 – 587 11,494

third party land 8,182 – – 125 489 226 51 8,721
Plant and machinery 26,823 – – 212 2,210 982 961 28,842
Other facilities, factory and office equipment 2,314 – – 55 178 15 121 2,331
Advance payments made and construction in progress 2,617 – – 37 1,617 – 1,223 3 2,971
Property, plant and equipment 39,936 – – 429 4,494 – 1,136 42,865
Leased products4 31,412 – 46 – 734 13,192 – 11,338 32,486
Investments accounted for using the equity method 514 – – 361 – 237 638
Investments in non-consolidated subsidiaries 205 – – 1 66 – 30 240

Participations 571 – – 6 – 2 575
Non-current marketable securities – – – – – – –
Other investments 776 – – 1 72 – 32 815
1
P
2
Including mergers.
3
Amended for the effect of refining the accounting policy for leased products as described in note 6 to the Group Financial Statements 2013.
4
This line includes the adjustments described in note 24 to the Group Financial Statements 2013.
5
Including assets under construction of € 2,570 million.
Depreciation and amortisation Carrying amount

1. 1. 2014 1 Trans- Current Changes Dis- 31. 12. 31. 12. 31. 12.
2
lation year not effect- posals 2014 2014 2013
differing net
ences income
4,645 – 1,068 – 1,825 3,888 5,453 5,022 Development costs

5 – – – – 5 364 369 Goodwill
665 10 178 – 92 761 682 788 Other intangible assets
5,315 10 1,246 – 1,917 4,654 6,499 6,179 Intangible assets

3,849 85 282 – 38 4,178 5,625 4,890 third party land
22,071 431 2,461 – 1,129 23,834 8,930 6,771 Plant and machinery
1,809 52 181 – 145 1,897 613 536 Other facilities, factory and office equipment
– – – – – – 2,014 3 2,971 Advance payments made and construction in progress
27,729 568 2,924 – 1,312 29,909 17,182 15,168 Property, plant and equipment
6,572 293 3,401 – 3,462 6,804 30,165 25,914 Leased products
– – – – – – 1,088 638 Investments accounted for using the equity method
76 1 1 – 16 62 164 166 Investments in non-consolidated subsidiaries

188 – 152 57 – 397 244 387 Participations
– – – – – – – – Non-current marketable securities
264 1 153 57 16 459 408 553 Other investments
Depreciation and amortisation Carrying amount

1. 1. 2013 2 Adjust- Trans- Current Changes Dis- 31. 12. 31. 12. 31. 12.
3
ment lation year not effect- posals 2013 2013 2012
differing net
ences income
4,141 – – 1,069 – 565 4,645 5,022 4,347 Development costs

5 – – – – – 5 369 369 Goodwill
516 – – 11 178 – 18 665 788 491 Other intangible assets
4,662 – – 11 1,247 – 583 5,315 6,179 5,207 Intangible assets

3,667 – – 53 251 – 34 3,831 4,890 4,502 third party land
21,099 – – 166 2,084 – 946 22,071 6,771 5,705 Plant and machinery
1,785 – – 40 159 – 109 1,795 536 530 Other facilities, factory and office equipment
– – – – – – – 2,971 5 2,604 Advance payments made and construction in progress
26,551 – – 259 2,494 – 1,089 27,697 15,168 13,341 Property, plant and equipment
6,944 – 175 – 132 3,215 – 3,280 6,572 25,914 24,468 Leased products4
– – – – – – – 638 514 Investments accounted for using the equity method
58 – – 16 – – 74 166 147 Investments in non-consolidated subsidiaries

170 – – 75 – 57 – 188 387 401 Participations
– – – – – – – – – Non-current marketable securities
228 – – 91 – 57 – 262 553 548 Other investments
126
23 Intangible assets
Intangible assets mainly comprise capitalised develop Intangible assets amounting to € 46 million (2013:
ment costs on vehicle and engine projects as well as € 43 million) are subject to restrictions on title.
subsidies for tool costs, licences, purchased development
projects, software and purchased customer bases. As in the previous year, there was no requirement to
Amortisation on intangible assets is presented in cost of recognise impairment losses or reversals of impair
sales, selling expenses and administrative expenses. ment losses on intangible assets in 2014.
Other intangible assets include a brand-name right As in the previous year no borrowing costs were recog
amounting to € 46 million (2013: € 43 million). This nised as a cost component of intangible assets during
line item also includes goodwill of € 33 million (2013: the year under report.
€ 33 million) allocated to the Automotive cash-gener
ating unit (CGU) and goodwill of € 331 million (2013: An analysis of changes in intangible assets is provided
€ 336 million) allocated to the Financial Services CGU, in note 22.
whereby the decrease compared to 31 December 2013
related to the sale of Noord Lease B. V., Groningen.
24 Property, plant and equipment buildings, for which economic ownership is attributable
A break-down of the different classes of property, plant to the BMW Group due to the nature of the lease ar
and equipment disclosed in the balance sheet and rangements (finance leases). Leases to which BMW AG
90 Income Statements changes during the year are shown in the analysis of is party, with a carrying amount of € 64 million (2013:
90 Statement of changes in Group tangible, intangible and investment € 37 million), run for periods up to 2028 at the latest and
92 Balance Sheets assets in note 22. contain price adjustment clauses as well as extension
and purchase options. The asset leased by BMW Tokyo
Equity As in the previous year, there was no requirement to Corp., Tokyo, has a carrying amount of € 2 million (2013:
98 Notes
recognise impairment losses in 2014. € 2 million) under a lease with a remaining term of
Policies 17 years. BMW Osaka Corp., Osaka, is party to finance
No borrowing costs were recognised as a cost compo leases running until 2022 for operational buildings with
of Comprehensive Income nent of property, plant and equipment during the year a carrying amount of € 1 million at 31 December 2014
149 Other Disclosures under report. (2013: € 2 million).
Property, plant and equipment include a total of € 67 mil Minimum lease payments of the relevant leases are as
lion (2013: € 42 million) relating to land and operational follows:
in € million 31. 12. 2014 31. 12. 2013
Total of future minimum lease payments

due within one year 13 14
due between one and five years 53 13
due later than five years 53 44
119 71
Interest portion of the future minimum lease payments
45 23
Present value of future minimum lease payments
74 48
25 Leased products cial services business. Minimum lease payments of

The BMW Group, as lessor, leases out its own products € 14,712 million (2013: € 12,906 million) from non-can
and those of other manufacturers as part of its finan cellable operating leases fall due as follows:
in € million 31. 12. 2014 31. 12. 2013
within one year 7,267 6,314

between one and five years 7,442 6,587
later than five years 3 5
Minimum lease payments 14,712 12,906
Contingent rents of € 56 million (2013: € 171 million), sals of impairment losses totalled € 44 million (2013:
based principally on the distance driven, were recog € 104 million).
nised in income. Some of the agreements contain price
adjustment clauses as well as extension and purchase An analysis of changes in leased products is provided in
options. note 22.
Impairment losses recognised on leased products

totalled € 137 million (2013: € 139 million), while rever
26 Investments accounted for using the equity method

Investments accounted for using the equity method re The DriveNow joint venture – comprising DriveNow
late to the joint ventures BMW Brilliance Automotive GmbH & Co. KG, Munich, and DriveNow Verwaltungs
Ltd., Shenyang (BMW Brilliance) on the one hand and GmbH, Munich, (both 50 % shareholdings) – is a car
DriveNow GmbH & Co. KG, Munich, and DriveNow sharing provider which currently offers individual mo
Verwaltungs GmbH, Munich, (DriveNow) on the other. bility services in major German cities and, going for
ward, increasingly outside Germany.
The BMW Brilliance Automotive Ltd., Shenyang, joint
venture (in which BMW has a 50 % shareholding) The accounting treatment applied to investments
produces various BMW brand models for the Chinese accounted for using the equity method is described in
market and also has engine manufacturing facilities, note 6. Financial information relating to equity ac
which supply the joint venture’s two plants with petrol counted investments is aggregated in the following
engines. table:
BMW Brilliance DriveNow
in € million 2014 2013 2014 2013
Disclosures relating to the income statement

Revenues 11,550 8,963 32 18
Scheduled depreciation 247 157 – –
Profit / loss before financial result 1,702 1,096 – 5 – 6
Interest income 24 16 – –
Interest expenses – – – –
Income taxes 449 285 – –
Other comprehensive income – – – –
Total comprehensive income 1,339 834 – 5 – 7
Dividends received by the Group 147 127 – –
128
BMW Brilliance DriveNow

in € million 2014 2013 2014 2013
Disclosures relating to the balance sheet

Non-current assets 4,171 2,741 1 1
Cash and cash equivalents 976 593 13 4
Current assets 3,404 2,727 19 10
Equity 2,910 1,868 12 6
Non-current financial liabilities – – – –
Non-current provisions and liabilities 450 237 – –
Current financial liabilities 236 – – –
Current provisions and liabilities 4,215 3,363 8 5
Reconciliation of aggregated financial information

Assets 7,575 5,468 20 11
Equity and liabilities 4,665 3,600 8 5
Net assets 2,910 1,868 12 6
Group’s interest in net assets (50 %) 1,455 934 6 3
Eliminations – 373 – 299 – –
Carrying amount 1,082 635 6 3

90 Statement of If the Group’s share of the at-equity result of BMW margin would increase by 0.9 percentage points (2013:
92 Balance Sheets Brilliance Automotive Ltd., Shenyang, were reported 0.6 percentage points) to 10.5 % (2013: 10.0 %).
as part of the Automotive segment’s EBIT, the EBIT
Equity
98 Notes
Policies 27 Other investments Disposals of investments in subsidiaries result from the
Other investments relate to investments in non-con first-time consolidation of six European branches.
of Comprehensive Income solidated subsidiaries, interests in associated com
149 Other Disclosures panies not accounted for using the equity method Impairment losses on participations – recognised with
165 Segment Information and joint operations, p
articipations and non-current income statement effect – related mainly to the invest
marketable securities. ment in SGL Carbon SE, Wiesbaden, which was written
down on the basis of objective criteria.
The additions to investments in subsidiaries relate
primarily to a share capital increase at the level of A break-down of the different classes of other invest
BMW iVentures B. V., Rijswijk. ments disclosed in the balance sheet and changes
during the year are shown in the analysis of changes in
Additions to participations mainly reflect the purchase Group tangible, intangible and investment assets in
of available-for-sale marketable securities. note 22.
28 Receivables from sales financing

Receivables from sales financing, totalling € 61,024 mil customers and dealers and € 15,175 million (2013:
lion (2013: € 54,117 million), comprise € 45,849 million € 13,276 million) for finance leases. Finance leases are
(2013: € 40,841 million) for credit financing for retail analysed as follows:
in € million 31. 12. 2014 31. 12. 2013
Gross investment in finance leases

due within one year 5,366 4,816
due between one and five years 11,231 9,748
16,706 14,662
Present value of future minimum lease payments
due within one year 4,898 4,378
due between one and five years 10,175 8,813
15,175 13,276
Unrealised interest income 1,531 1,386
Contingent rents recognised as income (generally re benefit of the lessor amounted to € 140 million (2013:
lating to the distance driven) amounted to € 2 million € 120 million).
(2013: € 3 million). Write-downs on finance leases
amounting to € 183 million (2013: € 159 million) were Receivables from sales financing include € 37,438 mil
measured and recognised on the basis of specific credit lion (2013: € 32,616 million) with a remaining term of
risks. Non-guaranteed residual values that fall to the more than one year.
Allowances for impairment and credit risk
in € million 31. 12. 2014 31. 12. 2013
Gross carrying amount 62,539 55,697

Allowance for impairment – 1,515 – 1,580
Net carrying amount 61,024 54,117
Allowances on receivables from sales financing – which only arise within the Financial Services segment – developed
as follows:
2014 Allowance for impairment recognised on a Total
in € million specific item basis group basis
Balance at 1 January* 1,098 482 1,580

Allocated / reversed 239 41 280
Utilised – 371 – 20 – 391
Exchange rate impact and other changes 34 12 46
Balance at 31 December 1,000 515 1,515
*
Balance at 1 January adjusted due to deconsolidation of entities.
130

Balance at 1 January 1,268 411 1,679

Utilised – 302 – 15 – 317
Exchange rate impact and other changes – 61 – 19 – 80
Balance at 31 December 1,099 481 1,580
At the end of the reporting period, impairment allow € 10,808 million (2013*: € 9,746 million). No impairment
ances of € 515 million (2013: € 481 million) were recog losses were recognised for these balances.
nised on a group basis on gross receivables from sales
financing totalling € 38,780 million (2013*: € 33,740 mil The estimated fair value of collateral received for receiv
lion). Impairment allowances of € 1,000 million (2013: ables on which impairment losses were recognised to
€ 1,099 million) were recognised at 31 December 2014 talled € 25,443 million (2013: € 23,689 million) at the end
on a specific item basis on gross receivables from sales of the reporting period. This collateral related primarily
financing totalling € 12,951 million (2013: € 12,211 mil to vehicles. The carrying amount of assets held as col
lion). lateral and taken back as a result of payment default
amounted to € 41 million (2013: € 30 million).
Receivables from sales financing which were not over
due at the end of the reporting period amounted to *
Prior year figures amended.
90 Statement of
92 Balance Sheets 29 Financial assets
Financial assets comprise:
Equity
98 Notes in € million 31. 12. 2014 31. 12. 2013
Policies
116 Notes to the Income Statement Derivative instruments 2,888 4,013
123 Notes to the Statement Marketable securities and investment funds 3,972 3,060
124 Notes to the Balance Sheet Loans to third parties 12 32
Credit card receivables 239 222
Other 297 825
Financial assets 7,408 8,152
thereof non-current 2,024 2,593

thereof current 5,384 5,559
The decrease in derivative instruments was primarily (€ 48 million; 2013: € 44 million) is reported under “Other
a ttributable to negative market price developments of financial assets”. Investment funds are held to secure
currency derivatives. these obligations. These funds are managed by BMW
Trust e. V., Munich, as part of a Contractual Trust
The rise in marketable securities and investment funds Arrangement (CTA) and are therefore netted against
mainly reflects an increase in the BMW Group’s strate the corresponding settlement arrears for pre-retirement
gic liquidity reserve. part-time work arrangements.
The amount by which the value of the investment funds

exceeds obligations for part-time working arrangements
Marketable securities and investment funds relate to available-for-sale financial assets and comprise:
in € million 31. 12. 2014 31. 12. 2013
Stocks 100 87

Fixed income securities 3,340 2,551
Other debt securities 532 422
Marketable securities and investment funds 3,972 3,060
The contracted maturities of debt securities are as follows:

in € million 31. 12. 2014 31. 12. 2013
Fixed income securities

due within three months 595 73
due later than three months 2,745 2,478
Other debt securities

due within three months 532 422
due later than three months – –
Debt securities 3,872 2,973

Receivables relating to credit card business comprise the following:
in € million 31. 12. 2014 31. 12. 2013
Gross carrying amount 247 231

Allowance for impairment – 8 – 9
Net carrying amount 239 222
Allowances for impairment losses on receivables relating to credit card business developed as follows during the
year under report:
Balance at 1 January 9 – 9
Allocated / reversed 6 – 6
Utilised – 8 – – 8
Exchange rate impact and other changes 1 – 1
Balance at 31 December 8 – 8

Balance at 1 January 13 – 13

Allocated / reversed 6 – 6
Exchange rate impact and other changes – – –
Balance at 31 December 9 – 9
132
30 Income tax assets

Income tax assets totalling € 1,906 million (2013: s ettled after more than twelve months. Some of the
€ 1,151 million) include claims amounting to € 653 mil claims may be settled earlier than this depending on
lion (2013: € 530 million) which are expected to be the timing of proceedings.
31 Other assets
Other assets comprise:
in € million 31. 12. 2014 31. 12. 2013*
Other taxes 1,078 867

Receivables from subsidiaries 721 779
Receivables from other companies in which an investment is held 1,055 950
Prepayments 1,323 1,074
Collateral receivables 412 706
Sundry other assets 1,543 794
Other assets 6,132 5,170
thereof non-current 1,094 912

thereof current 5,038 4,258
*
90 Income Statements Prior year figures have been adjusted in accordance with IAS 8, see note 9.
90 Statement of
92 Balance Sheets Receivables from subsidiaries include trade receivables € 674 million (2013: € 565 million) have a maturity of less
of € 41 million (2013: € 102 million) and financial receiva than one year.
Equity bles of € 680 million (2013: € 677 million). They include
98 Notes
€ 293 million (2013: € 253 million) with a remaining term Collateral receivables comprise mainly customary
Policies of more than one year. collateral (banking deposits) arising on the sale of re
ceivables.
of Comprehensive Income Receivables from other companies in which an invest
149 Other Disclosures ment is held include € 1,054 million (2013*: € 905 mil In the financial year 2014, expected reimbursement
165 Segment Information lion) due within one year. claims totalling € 641 million arising in connection with
warranty arrangements with suppliers were reclassified
Prepayments of € 1,323 million (2013*: € 1,074 million) from other provisions to sundry other assets.
relate mainly to prepaid interest, insurance premiums
and commission paid to dealers. Prepayments of *
32 Inventories
Inventories comprise the following:
in € million 31. 12. 2014 31. 12. 2013*
Raw materials and supplies 918 851

Work in progress, unbilled contracts 944 851
Finished goods and goods for resale 9,227 7,893
Inventories 11,089 9,595
*
At 31 December 2014, inventories measured at their to net realisable value amounting to € 29 million (2013:
net realisable value amounted to € 723 million (2013: € 28 million) were recognised in 2014. Reversals of
€ 592 million) and are included in total inventories of write-downs amounted to € 3 million (2013: € 4 million).
€ 11,089 million (2013*: € 9,595 million). Write-downs *
33 Trade receivables
Trade receivables totalling € 2,153 million (2013: € 2,449 million) include an unchanged amount of € 47 million which
is due later than one year.
in € million 31. 12. 2014 31. 12. 2013
Gross carrying amount 2,236 2,555

Allowance for impairment – 83 – 106
Net carrying amount 2,153 2,449
Allowances on trade receivables developed as following during the year under report:
Balance at 1 January* 98 9 107

Allocated / reversed – 6 – 2 – 8
Exchange rate impact and other changes – 1 – – 1
Balance at 31 December 76 7 83
*
Including entities consolidated for the first time during the financial year.

Balance at 1 January 105 6 111

Exchange rate impact and other changes – 2 – 1 – 3
Balance at 31 December 97 9 106
Some trade receivables were overdue for which an impairment loss was not recognised. Overdue balances are
analysed into the following time windows:
in € million 31. 12. 2014 31. 12. 2013
1 – 30 days overdue 100 80

More than 120 days overdue 52 17
281 148
134
Receivables that are overdue by between one and end. In the case of trade receivables, collateral is gen
30 days do not normally result in bad debt losses since erally held in the form of vehicle documents and
the overdue nature of the receivables is primarily at bank guarantees so that the risk of bad debt loss is ex
tributable to the timing of receipts around the month- tremely low.
34 Cash and cash equivalents

Cash and cash equivalents of € 7,688 million (2013*: with an original term of up to three months.
€ 7,671 million) comprise cash on hand and at bank, all *
35 Equity
Number of shares issued
Preferred stock Common stock
2014 2013 2014 2013
Shares issued / in circulation at 1 January 54,259,787 53,994,217 601,995,196 601,995,196

Shares issued in conjunction with Employee Share Scheme 239,777 266,152 – –
Less: shares repurchased and re-issued 20 582 – –
Shares issued / in circulation at 31 December 54,499,544 54,259,787 601,995,196 601,995,196

90 Statement of At 31 December 2014 common stock issued by BMW AG 4.8 million shares and € 4.8 million respectively at the
92 Balance Sheets was divided, as at the end of the previous year, into end of the reporting period. The Company is authorised
601,995,196 shares of common stock with a par-value of to issue 5 million shares of non-voting preferred stock
Equity € 1. Preferred stock issued by BMW AG was divided into amounting to nominal € 5.0 million prior to 14 May 2019.
98 Notes
54,499,544 shares (2013: 54,259,787 shares) with a par- The share premium of € 14.6 million arising on the share
Policies value of € 1. Unlike the common stock, no voting rights capital increase was transferred to capital reserves.
are attached to the preferred stock. All of the Company’s
of Comprehensive Income stock is issued to bearer. Preferred stock bears an addi Capital reserves
149 Other Disclosures tional dividend of € 0.02 per share. Capital reserves include premiums arising from the issue
165 Segment Information of shares and totalled € 2,005 million (2013: € 1,990 mil
In 2014, a total of 239,777 shares of preferred stock was lion). The change related to the share capital increase in
sold to employees at a reduced price of € 37.08 per share conjunction with the issue of shares of preferred stock
in conjunction with the Company’s Employee Share to employees.
Programme. These shares are entitled to receive divi
dends with effect from the financial year 2015. 20 shares Revenue reserves
of preferred stock were bought back via the stock ex Revenue reserves comprise the post-acquisition and non-
change in conjunction with the Company’s Employee distributed earnings of consolidated companies. In
Share Programme. addition, remeasurements of the net defined benefit lia
bility for pension plans are also presented in revenue
Further information on share-based remuneration is reserves along with positive and negative goodwill aris
provided in note 20. ing on the consolidation of Group companies prior to
31 December 1994.
Issued share capital increased by € 0.2 million as a re
sult of the issue to employees of 239,757 shares of non- Revenue reserves increased during the financial year
voting preferred stock. The number of authorised shares 2014 to € 35,621 million. They were increased by the
and the Authorised Capital of BMW AG amounted to amount of the net profit attributable to shareholders of
BMW AG amounting to € 5,798 million (2013*: € 5,303 Capital management disclosures

million) and reduced by the payment of the dividend for The BMW Group’s objectives when managing capital
2013 amounting to € 1,707 million (for 2012: € 1,640 mil are to safeguard the Group’s ability to continue as
lion). Revenue reserves decreased by € 1,592 million a going concern in the long-term and to provide an
(2013: increased by € 936 million) as a result of remeasure adequate return to shareholders.
ments of the net defined benefit liability for pension
plans (net of deferred tax recognised directly in equity). The BMW Group manages the capital structure and
makes adjustments to it in the light of changes in eco
The unappropriated profit of BMW AG at 31 December nomic conditions and the risk profile of the underlying
2014 amounts to € 1,904 million and will be proposed assets.
to the Annual General Meeting for distribution. This
amount includes € 158 million relating to preferred stock. The BMW Group is not subject to any external minimum
The amount proposed for distribution represents an equity capital requirements. Within the Financial Ser
amount of € 2.92 per share of preferred stock and € 2.90 vices segment, however, there are a number of indi
per share of common stock. The proposed distribution vidual entities which are subject to equity capital require
must be authorised by the shareholders at the Annual ments set by regulatory banking agencies.
General Meeting of BMW AG. It is therefore not recog
nised as a liability in the Group Financial Statements. In order to manage its capital structure, the BMW Group
uses various instruments including the amount of divi
Accumulated other equity dends paid to shareholders and share buy-backs.
Accumulated other equity comprises all amounts recog
nised directly in equity resulting from the translation Moreover, the BMW Group pro-actively manages debt
of the financial statements of foreign subsidiaries, the capital, determining levels of debt capital transactions
effects of recognising changes in the fair value of deriva with a target debt structure in mind. An important
tive financial instruments and marketable securities aspect of the selection of financial instruments is the
directly in equity and the related deferred taxes recog objective to achieve matching maturities for the Group’s
nised directly in equity. financing requirements. In order to reduce non-sys
tematic risk, the BMW Group uses a variety of financial
Minority interests instruments available on the world’s capital markets to
Equity attributable to minority interests amounted to achieve optimal diversification.
€ 217 million (2013: € 188 million). This includes a mi
nority interest of € 19 million in the results for the year The capital structure at the end of the reporting period
(2013: € 26 million). was as follows:
*
in € million 31. 12. 2014 31. 12. 2013*
Equity attributable to shareholders of BMW AG 37,220 35,412

Proportion of total capital 31.6 % 33.5 %
Non-current financial liabilities 43,167 39,450

Current financial liabilities 37,482 30,854
Total financial liabilities 80,649 70,304
Proportion of total capital 68.4 % 66.5 %
Total capital 117,869 105,716
*
136
Equity attributable to shareholders of BMW AG decreased a European car manufacturer. Since July 2011, the
during the financial year by 1.9 percentage points, BMW AG has a long-term rating of A2 (with stable out
primarily reflecting the increase in financial liabilities. look) and a short-term rating of P-1 from the rating
agency Moody’s. This means that BMW AG continues
Since December 2013, the BMW AG has a long-term to enjoy the best ratings of all European car manufac
rating of A+ (with stable outlook) and a short-term rating turers, clearly reflecting the financial strength of the
of A-1 from the rating agency Standard & Poor’s, cur BMW Group.
rently the highest rating given by Standard & Poor’s to
Company rating Moody’s Standard & Poor’s
Non-current financial liabilities A2 A +

Current financial liabilities P-1 A-1
Outlook stable stable
With their current long-term ratings of A+ (Standard & for short-term debt is also classified by the rating agen
Poor’s) and A2 (Moody’s), the agencies continue to con cies as very good, thus enabling it to obtain refinancing
firm BMW AG’s robust creditworthiness for debt with a funds on competitive conditions.
term of more than one year. BMW AG’s creditworthiness

90 Income Statements 36 Pension provisions Pension commitments in Germany are mostly covered
90 Statement of Pension provisions are recognised as a result of commit by assets contributed to BMW Trust e. V. , Munich,
92 Balance Sheets ments to pay future vested pension benefits and cur in conjunction with a contractual trust arrangement
rent pensions to present and former employees of the (CTA). The main other countries with funded plans
Equity BMW Group and their dependants. Depending on the are the UK, the USA, Switzerland, the Netherlands,
98 Notes
legal, economic and tax circumstances prevailing in each Belgium and Japan.
Policies country, various pension plans are used, based generally
on the length of service, salary and remuneration struc In the case of externally funded plans, the defined bene
of Comprehensive Income ture of the employees involved. Due to similarity of na fit obligation is offset against plan assets measured at
149 Other Disclosures ture, the obligations of BMW Group companies in the their fair value. Where the plan assets exceed the pen
165 Segment Information USA and of BMW (South Africa) (Pty) Ltd., Pretoria, for sion obligations and the BMW Group has a right of re
post-retirement medical care are also accounted for as imbursement or a right to reduce future contributions,
pension provisions in accordance with IAS 19. it reports an asset (within “Other financial assets”) at
an amount equivalent to the present value of the future
Post-employment benefit plans are classified as either economic benefits attached to the plan assets. If the
defined contribution or defined benefit plans. Under plan is externally funded, a liability is recognised under
defined contribution plans an enterprise pays fixed con pension provisions where the benefit obligation exceeds
tributions into a separate entity or fund and does not fund assets.
assume any other obligations. The total pension expense
for defined contribution plans of the BMW Group Remeasurements of the net liability arise from changes
amounted to € 60 million (2013: € 51 million). Employer in the present value of the defined benefit obligation,
contributions paid to state pension insurance plans to the fair value of the plan assets or the asset ceiling. Rea
talled € 517 million (2013: € 470 million). sons for remeasurements include changes in financial
and demographic assumptions as well as changes in the
Under defined benefit plans the enterprise is required to detailed composition of beneficiaries. Remeasurements
pay the benefits granted to present and past employees. are recognised immediately in “Other comprehensive
Defined benefit plans may be funded or unfunded, income” and hence directly in equity (within revenue
the latter sometimes covered by accounting provisions. reserves).
Past service cost arises where a BMW Group entity in The defined benefit obligation is calculated on an actu
troduces a defined benefit plan or changes the benefits arial basis. The actuarial computation requires the use
payable under an existing plan. These costs are recog of estimates and assumptions, which depend on the
nised immediately in the income statement. Similarly, economic situation in each particular country. The most
gains and losses arising on the settlement of a defined important assumptions applied by the BMW Group are
benefit plan are recognised immediately in the income shown below. The following weighted average values
statement. have been used for Germany, the United Kingdom and
other countries:
31 December Germany United Kingdom Other
in % 2014 2013 2014 2013 2014 2013
Discount rate 2.10 3.50 3.40 4.40 3.48 4.46

Pension level trend 1.60 2.00 2.43 3.32 0.03 0.05
The following mortality tables are applied in countries, in which the BMW Group has significant defined benefit plans:
Germany Mortality Table 2005 G issued by Prof. K. Heubeck (with invalidity rates reduced by 50 %)
United Kingdom S1PA tables weighted accordingly, and S1NA tables minus 2 years, both with a minimum long term annual improvement allowance
USA RP2014 Mortality Table with collar adjustments projected with MP2014
In Germany, the so-called “pension entitlement trend” the UK also takes account of restrictions due to caps
(Festbetragstrend) also represents a significant actuarial and floors.
assumption for the purposes of determining benefits
payable at retirement and was left unchanged at 2.0 %. Based on the measurement principles contained in
By contrast, the salary level trend assumption is subject IAS 19, the following balance sheet carrying amounts
to a comparatively low level of sensitivity within the apply to the Group’s pension plans:
BMW Group. The calculation of the salary level trend in
31 December Germany United Kingdom Other Total
in € million 2014 2013 2014 2013 2014 2013 2014 2013
Present value of defined benefit obligations 9,636 7,400 9,499 7,409 1,327 949 20,462 15,758
Fair value of plan assets 7,323 6,749 7,734 6,076 804 636 15,861 13,461
Effect of limiting net defined benefit asset to asset ceiling – – – – 2 4 2 4
Carrying amounts at 31 December 2,313 651 1,765 1,333 525 317 4,603 2,301
thereof pension provision 2,313 652 1,765 1,333 526 318 4,604 2,303
thereof assets – – 1 – – – 1 – 1 – 1 – 2
138
The increase in defined benefit obligations results mainly The assets of the German pension plans are administered
from the change in the discount rate used for the ac by BMW Trust e. V. , Munich, (German registered asso
tuarial computation in Germany, the UK and the USA. ciation) in accordance with a CTA. The representative
bodies of this entity are the Board of Directors and the
The provision for pension-like obligations for post-em Members’ General Meeting. BMW Trust e.V., Munich,
ployment medical care in the USA and South Africa currently has seven members and three Board of Direc
amounts to € 57 million (2013: € 45 million) and is deter tors members elected by the Members’ General Meeting.
mined on a similar basis to the measurement of pension The Board of Directors is responsible for investments,
obligations in accordance with IAS 19. Increased costs drawing up and deciding on investment guidelines as
do not have a direct impact on medical care obligations well as monitoring compliance with those guidelines.
relating to pensioners in the USA. In the case of South The members of the association can be employees, senior
Africa, however, it was assumed that costs would in executives and members of the Board of Directors. An
crease in the long term by 8.3 % (2013: 8.1 %) p. a. The ordinary Members’ General Meeting takes place once
expense recognised for obligations relating to post-em every calendar year and deals with a range of matters,
ployment medical care amounted to € 8 million (2013: including receiving and approving the association’s an
income of € 40 million). nual report, ratifying the activities of the Board of Direc
tors and adopting changes to the association’s statutes.
Numerous defined benefit plans are in place through
out the BMW Group, the most significant of which are United Kingdom
described below. In the United Kingdom, the BMW Group has defined
benefit plans, which are primarily employer-funded
90 Income Statements Germany combined with employee-funded components based
90 Statement of Both employer- and employee-funded benefit plans are on the conversion of employee remuneration. These
92 Balance Sheets in place in Germany. Benefits paid in conjunction with plans are subject to statutory minimum recovery require
these plans comprise old-age retirement pensions as ments. Benefits paid in conjunction with these plans
Equity well as invalidity and surviving dependents’ benefits. comprise old-age retirement pensions as well as inva
98 Notes
lidity and surviving dependants’ benefits. These de
Policies The Deferred Remuneration Retirement Plan is an em fined benefit plans have been closed to new entrants,
ployee-financed defined contribution plan with a mini who, since 1 January 2014, are covered by a defined
of Comprehensive Income mum rate of return. The fact that the plan involves a contribution plan.
149 Other Disclosures minimum rate of return means that it is classified as a
165 Segment Information defined benefit plan. Employees have the option to The pension plans are administered by BMW Pension
waive payment of certain remuneration components in Trustees Limited, Hams Hall, and BMW (UK) Trustees
return for a future benefit. Any employer social security Limited, Hams Hall, both trustee companies which act
contributions saved are credited in the following year independently of the BMW Group. BMW (UK) Trustees
to the individual’s benefits account. The converted re Limited, Hams Hall, is represented by 14 trustees and
muneration components and the social security contri BMW Pension Trustees Limited, Hams Hall, by five
butions saved are invested on capital markets. When trustees. A minimum of one third of the trustees must
the benefit falls due, it is paid on the basis of the higher be elected by plan participants. The trustees represent
of the value of the depot account or a guaranteed mini the interests of plan participants and decide on invest
mum amount. ment strategies and plan amendments. Recovery con
tributions to the funds are determined in agreement
Defined benefit obligations also remain in Germany, for with the BMW Group.
which benefits are determined either by multiplying
a fixed amount by the number of years of service or on USA
the basis of an employee’s final salary. The defined bene The BMW Group’s defined benefit plans in the USA are
fit plans have been closed to new entrants. With effect primarily employer-funded and include final salary
from 1 January 2014, new employees receive a defined pension plans and a post-retirement medical care plan.
contribution entitlement with minimum rate of return. Benefits paid in conjunction with these plans comprise
old-age retirement pensions, early retirement benefits, and selection of investment managers as well as regular
surviving dependants’ benefits as well as post-retire allocations and retrospective allocations to the plan.
ment medical care benefits. The committee members are nominated by the manage
ment of the relevant participating US entities. Plan
Statutory minimum funding requirements apply to the committees act in a fiduciary capacity and are subject to
final salary pension plans. Plan participants are repre statutory framework conditions.
sented by a committee consisting of six members, which
is authorised to take all decisions pertaining to the rele The change in the net defined benefit liability for pen-
vant pension plan, including plan structure, investments sion plans can be derived as follows:
Defined benefit Plan assets Total Limitation of Net defined
in € million obligation the net defined benefit liability
benefit asset to
the asset ceiling
1 January 2014 15,758 – 13,461 2,297 4 2,301
Expense / income
Current service cost 337 – 337 – 337
Interest expense (+) / income (–) 628 – 540 88 – 88
Past service cost – 3 – – 3 – – 3
Gains (–) or losses (+) arising from settlements – 8 – – 8 – – 8
Remeasurements
Gains (–) or losses (+) on plan assets, excluding
amounts included in interest income – – 1,394 – 1,394 – – 1,394
Gains (–) or losses (+) arising from changes in
demographic assumptions 53 – 53 – 53
financial assumptions 3,490 – 3,490 – 3,490
Changes in the limitation of the net defined benefit
asset to the asset ceiling – – – – 1 – 1
Gains (–) or losses (+) arising from
experience adjustments – 24 – – 24 – – 24
Transfers to fund – – 383 – 383 – – 383

Employee contributions 71 – 71 – – –
Pensions and other benefits paid – 519 522 3 – 3
Translation differences and other changes 679 – 534 145 – 1 144
31 December 2014 20,462 – 15,861 4,601 2 4,603
thereof pension provision 4,604

thereof assets – 1
140
Defined benefit Plan assets Total Limitation of Net defined

in € million obligation the net defined benefit liability
benefit asset to
the asset ceiling
1 January 2013 16,255 – 12,447 3,808 4 3,812
Expense / income
Current service cost 362 – 362 – 362
Interest expense (+) / income (–) 565 – 438 127 – 127
Past service cost – 53 – – 53 – – 53
Gains (–) or losses (+) arising from settlements 2 – 2 – 2
Remeasurements
Gains (–) or losses (+) on plan assets, excluding
amounts included in interest income – – 481 – 481 – – 481
demographic assumptions 4 – 4 – 4
financial assumptions – 818 – – 818 – – 818
Changes in the limitation of the net defined benefit
asset to the asset ceiling – – – 1 1
Gains (–) or losses (+) arising from
experience adjustments 34 – 34 – 34
90 Statement of
92 Balance Sheets Transfers to fund – – 509 – 509 – – 509
94 Cash Flow Statements Employee contributions 64 – 64 – – –
Equity Pensions and other benefits paid – 460 324 – 136 – – 136
98 Notes Translation differences and other changes – 197 154 – 43 – 1 – 44
Policies 31 December 2013 15,758 – 13,461 2,297 4 2,301
of Comprehensive Income thereof pension provision 2,303
thereof assets – 2
Net interest expense on the net defined benefit liability Remeasurements on the obligations side gave rise
is presented within the financial result. All other com to a positive amount of € 3,519 million (2013: negative
ponents of pension expense are presented in the income amount of € 780 million) and related mainly to the
statement under cost of sales, selling and administrative lower discount rates used in Germany, the UK and
expenses. the USA.
The net defined benefit liability for pension plans in Germany, the UK and other countries changed as follows:
Germany
Defined benefit obligation Plan assets Net liability
in € million 2014 2013 2014 2013 2014 2013
1 January 7,400 7,974 – 6,749 – 6,064 651 1,910

Expense(+) / income (–) 475 483 – 237 – 183 238 300
Remeasurements 1,872 – 946 – 351 – 174 1,521 – 1,120
Payments to external funds – – – 97 – 301 – 97 – 301
Employee contributions 48 42 – 48 – 42 – –
Payments on account and pension payments – 159 – 154 159 15 – – 139
Other changes – 1 – – – 1
31 December 9,636 7,400 – 7,323 – 6,749 2,313 651
United Kingdom
Defined benefit obligation Plan assets Net liability
in € million 2014 2013 2014 2013 2014 2013
1 January 7,409 7,137 – 6,076 – 5,782 1,333 1,355

Expense(+) / income (–) 405 345 – 275 – 233 130 112
Remeasurements 1,390 330 – 990 – 305 400 25
Payments to external funds – – – 212 – 135 – 212 – 135
Employee contributions 20 18 – 20 – 18 – –
Payments on account and pension payments – 294 – 261 302 269 8 8
Translation differences and other changes 569 – 160 – 463 128 106 – 32
31 December 9,499 7,409 – 7,734 – 6,076 1,765 1,333
Other
Defined benefit Plan assets Effect of limiting the Net liability
obligation net defined benefit
asset to the asset ceiling
in € million 2014 2013 2014 2013 2014 2013 2014 2013
1 January 949 1,144 – 636 – 601 4 4 317 547

Effect of first-time consolidation – – – – – – – –
Expense(+) / income (–) 74 48 – 28 – 22 – – 46 26
Remeasurements 257 – 164 – 53 – 2 – 1 1 203 – 165
Payments to external funds – – – 74 – 73 – – – 74 – 73
Employee contributions 3 4 – 3 – 4 – – – –
Payments on account and pension payments – 66 – 45 61 40 – – – 5 – 5
Translation differences and other changes 110 – 38 – 71 26 – 1 – 1 38 – 13
31 December 1,327 949 – 804 – 636 2 4 525 317
Depending on the cash flow profile and risk structure of the pension obligations involved, pension plan assets are
invested in various investment classes.
142
Plan assets in Germany, the UK and other countries comprised the following:
Components of plan assets
Germany United Kingdom Other Total
in € million 2014 2013 2014 2013 2014 2013 2014 2013
Equity instruments 1,865 1,718 1,230 1,030 203 133 3,298 2,881
Debt instruments 4,509 4,143 4,562 3,333 379 263 9,450 7,739
thereof investment grade 3,271 2,987 4,331 3,160 334 243 7,936 6,390
thereof non-investment grade 1,238 1,156 231 173 45 20 1,514 1,349
Real estate – – 3 3 – 19 3 22
Money market funds – 89 100 113 12 43 112 245
Absolute return funds – – 26 21 – – 26 21
Other – – 5 26 – 1 5 27
Total with quoted market price 6,374 5,950 5,926 4,526 594 459 12,894 10,935
Debt instruments 183 177 298 310 12 12 493 499
thereof investment grade 183 177 111 136 12 9 306 322
thereof non-investment grade – – 187 174 – 3 187 177
Real estate 107 99 683 570 105 64 895 733
Cash and cash equivalents 11 1 9 – – 1 20 2
Absolute return funds 424 361 557 454 – – 981 815
90 GROUP FINANCIAL S TATEMENTS Other 224 161 261 216 93 100 578 477
90 Statement of Total without quoted market price 949 799 1,808 1,550 210 177 2,967 2,526
92 Balance Sheets 31 December 7,323 6,749 7,734 6,076 804 636 15,861 13,461
Equity
98 Notes
Employer contributions to plan assets are expected to account in the actuarial assumptions applied. The finan
Policies amount to € 652 million in the coming year. Plan assets cial risk of longer-than-assumed life expectancy is hedged
of the BMW Group include own transferable financial for the BMW Group’s largest pension plan in the UK by
of Comprehensive Income instruments amounting to € 5 million (2013: € 4 million). means of a so-called “longevity hedge”.
165 Segment Information The BMW Group is exposed to risks arising from de In order to reduce currency exposures, a substantial
fined benefit plans on the one hand and defined contri portion of plan assets are either invested in the same
bution plans with a minimum return guarantee on the currency as the underlying plan or hedged by means of
other. Pension obligations to employees under such plans currency derivatives.
are measured on the basis of actuarial reports. Future
pension payments are discounted by reference to mar Pension fund assets are monitored continuously and
ket yields on high quality corporate bonds. These yields managed from a risk-and-yield perspective. Risk is
are subject to market fluctuation and influence the level reduced by ensuring a broad spread of investments. In
of pension obligations. Furthermore, changes in other this context, the BMW Group continuously monitors
actuarial parameters, such as expected rates of inflation, the degree of coverage of pension plans as well as adher
also have an impact on pension obligations. ence to the stipulated investment strategy.
A substantial portion of plan assets is invested in debt As part of the internal reporting procedures and for in
instruments in order to minimise the effect of capital ternal management purposes, financial risks relating
market fluctuations on the net liability. The asset port to the pension plans are reported on using a deficit-
folio also includes equity instruments, property and value-at-risk approach. The investment strategy is also
alternative investments – asset classes capable of gener subjected to regular review together with external con
ating the higher rates of return necessary to cover risks sultants, with the aim of ensuring that investments
(such as changes in mortality tables) not taken into are structured to coincide with the timing of pension
payments and the expected pattern of pension obliga payments out of operations will be substantially re
tions. In their own way, each of these measures helps to duced in the future, since most of the Group’s pension
reduce fluctuations in pension funding shortfalls. obligations are settled out of the assets of pension
funds / trust fund arrangements.
Most of the BMW Group’s pension assets are adminis
tered separately and kept legally segregated from com The defined benefit obligation relates to current em
pany assets using trust fund arrangements. As a conse ployees, former employees with vested benefits and
quence, the level of funds required to finance pension pensioners as follows:
in € million 2014 2013 2014 2013 2014 2013
Current employees 6,495 4,715 2,295 1,604 1,003 723

Pensioners 2,650 2,297 4,208 3,651 212 141
Former employees with vested benefits 491 388 2,996 2,154 112 85
Defined benefit obligation 9,636 7,400 9,499 7,409 1,327 949
The sensitivity analysis provided below shows the ex at the end of the reporting period, if the other assump
tent to which – based on an appropriate review – the tions used in the calculation were kept constant. The
defined benefit obligation would have been affected by defined benefit obligation amounted to € 20,462 million
changes in the relevant assumptions that were possible at 31 December 2014.
31 December Change in defined benefit obligation
2014 2013
in € million in % in € million in %
Discount rate increase of 0.75 % – 2,888 – 14.1 – 2,028 – 12.9

decrease of 0.75 % 3,675 18.0 2,528 16.0
Pension level trend increase of 0.25 % 727 3.6 506 3.2
decrease of 0.25 % – 679 – 3.3 – 479 – 3.0
Average life expectancy increase of 1 year 703 3.4 510 3.2
decrease of 1 year – 700 – 3.4 – 514 – 3.3
Pension entitlement trend increase of 0.25 % 152 0.7 101 0.6
decrease of 0.25 % – 146 – 0.7 – 97 – 0.6
In the UK, the sensitivity analysis for the pension level The weighted duration of all pension obligations in
trend also takes account of restrictions due to caps and Germany, the UK and other countries (based on present
floors. values of the defined benefit obligation) developed as
follows:
in years 2014 2013 2014 2013 2014 2013
Weighted duration of all pension obligations 21.4 19.6 19.9 18.3 19.2 14.9
144
Statutory minimum funding and recovery requirements to measure the level of funding. In conjunction with
apply in the UK and the USA which may have an effect these valuations, funding plans are drawn up and the
on future amounts. Valuations are performed regularly amount of any special allocations determined.
37 Other provisions
Other provisions comprise the following items:
in € million 31. 12. 2014 31. 12. 2013*
Total thereof Total thereof
due within due within
one year one year
Obligations for personnel and social expenses 1,871 1,442 1,698 1,300
Obligations for ongoing operational expenses 4,887 1,786 3,468 1,076
Other obligations 2,032 1,294 2,074 1,036
Other provisions 8,790 4,522 7,240 3,412
*
Provisions for obligations for personnel and social ex and other guaranties offered by the BMW Group. De
penses comprise mainly performance-related remunera pending on when claims are made, it is possible that
tion components, early retirement part-time working the BMW Group may be called upon to fulfil obligations
90 Income Statements arrangements and employee long-service awards. Obli over the whole period of the warranty or guarantee.
90 Statement of gations for performance-related remuneration compo Provisions for other obligations cover numerous specific
92 Balance Sheets nents are normally settled in the following financial year. risks and obligations of uncertain timing and amount,
Provisions for obligations for on-going operational ex in particular for litigation and liability risks.
Equity penses relate primarily to warranty obligations and com
98 Notes
prise both statutorily prescribed manufacturer warranties Other provisions changed during the year as follows:
Policies
116 Notes to the Income Statement in € million 1.1. 2014 Translation Additions Reversal of Utilised Reversed 31. 12. 2014
123 Notes to the Statement differences discounting
149 Other Disclosures Obligations for personnel and social expenses 1,698 13 1,438 9 – 1,271 – 16 1,871
Obligations for ongoing operational expenses 3,468 304 2,435* 70 – 1,304 – 86 4,887
Other obligations 2,074 62 602 23 – 449 – 280 2,032
Other provisions 7,240 379 4,475 102 – 3,024 – 382 8,790
*
Including the reclassification described in note 31 amounting to € 641 million.
Income from the reversal of other provisions amounting to € 198 million (2013: € 134 million) is recorded in cost of
sales and in selling and administrative expenses.
38 Income tax liabilities Current tax liabilities of € 1,590 million (2013*: € 2,319 mil
Current income tax liabilities totalling € 1,590 million lion) comprise € 151 million (2013: € 197 million) for
(2013*: € 2,319 million) include obligations amounting to taxes payable and € 1,439 million (2013*: € 2,122 million)
€ 956 million (2013: € 823 million) which are expected to for tax provisions. Tax provisions totalling € 1 million were
be settled after more than twelve months. Some of the reversed in the year under report (2013: € 44 million).
liabilities may be settled earlier than this depending on
the timing of proceedings. *
39 Financial liabilities
Financial liabilities include all liabilities of the BMW financing activities. Financial liabilities comprise the
Group at the relevant balance sheet dates relating to following:
31 December 2014 Maturity Maturity Maturity Total
in € million within between one later than
one year and five years five years
Bonds 8,561 22,817 4,111 35,489

Liabilities to banks 7,784 3,281 489 11,554
Liabilities from customer deposits (banking) 9,157 3,309 – 12,466
Commercial paper 5,599 – – 5,599
Asset backed financing transactions 3,825 6,990 69 10,884
Derivative instruments 1,930 1,190 23 3,143
Other 626 387 501 1,514
Financial liabilities 37,482 37,974 5,193 80,649

Bonds 7,166 20,329 2,875 30,370

Derivative instruments 426 632 45 1,103
Other 723 307 334 1,364
Financial liabilities 30,854 36,046 3,404 70,304
The increase in liabilities relating to derivatives results The main instruments used are corporate bonds, asset-
from the fair value measurement of currency and com backed financing transactions, liabilities to banks and
modity derivative instruments. liabilities from customer deposits (banking).
The BMW Group uses various short-term and long-term Customer deposit liabilities arise in the BMW Group’s
refinancing instruments on money and capital markets banks in Germany and the USA, both of which offer a
to finance its operations. This diversification enables it to range of investment products.
obtain attractive market conditions.
146
Bonds comprise:
Issuer Interest Issue volume Weighted Weighted
in relevant currency average maturity average nominal
(ISO-Code) period (in years) interest rate (in %)
BMW Finance N. V., The Hague variable EUR 4,835 million 2.3 0.3
variable GBP 380 million 1.2 0.2
variable SEK 6,500 million 2.3 0.3
variable USD 540 million 1.8 0.3
fixed AUD 700 million 3.9 4.6
fixed CHF 300 million 6.0 1.8
fixed EUR 13,564 million 6.6 3.0
fixed GBP 1,050 million 6.1 3.0
fixed JPY 31,000 million 2.8 0.3
fixed NOK 3,500 million 3.7 3.2
BMW (UK) Capital plc, Farnborough fixed CHF 500 million 5.0 2.1
fixed GBP 300 million 8.0 5.0
BMW US Capital, LLC, Wilmington, DE variable EUR 100 million 3.0 0.1
variable SEK 1,000 million 2.7 0.3
variable USD 1,710 million 2.8 0.3
fixed AUD 200 million 3.2 4.0
90 Income Statements fixed CHF 325 million 7.0 3.6
90 Statement of fixed EUR 3,590 million 5.5 3.0
92 Balance Sheets fixed GBP 300 million 5.0 2.0
fixed HKD 500 million 3.0 1.4
Equity fixed JPY 6,000 million 2.0 0.3
98 Notes
fixed NOK 1,500 million 3.0 2.4
Policies fixed NZD 100 million 3.0 4.4
fixed USD 2,245 million 8.0 3.5
of Comprehensive Income BMW Australia Finance Ltd., Melbourne, Victoria variable AUD 200 million 3.0 3.3
149 Other Disclosures variable EUR 150 million 2.3 0.3
165 Segment Information variable USD 330 million 2.3 0.7
Other variable JPY 10,000 million 3.0 0.3
fixed INR 6,000 million 4.2 10.2
fixed CAD 2,275 million 3.9 2.3
fixed KRW 370,000 million 3.2 3.2
The following details apply to the commercial paper:

Issuer Issue volume Weighted Weighted
in relevant currency average maturity average nominal
(ISO-Code) period (in days) interest rate (in %)
BMW Finance N. V., The Hague EUR 1,007 million 30 0.03
GBP 825 million 56 0.5
USD 725 million 73 0.2
BMW Malta Finance Ltd., Floriana EUR 250 million 12 0.03
BMW US Capital, LLC, Wilmington, DE USD 3,260 million 33 0.1
40 Other liabilities
Other liabilities comprise the following items:
Other taxes 929 – 14 943

Social security 69 7 2 78
Advance payments from customers 460 105 – 565
Deposits received 415 348 5 768
Payables to subsidiaries 162 – – 162
Payables to other companies in which an investment is held 5 – – 5
Deferred income 1,894 3,373 221 5,488
Other 3,841 193 7 4,041
Other liabilities 7,775 4,026 249 12,050
31 December 2013* Maturity Maturity Maturity Total

Other taxes 729 1 15 745

Social security 60 11 3 74
Advance payments from customers 528 77 – 605
Deposits received 274 93 14 381
Payables to subsidiaries 157 – – 157
Payables to other companies in which an investment is held 70 – – 70
Deferred income 1,666 3,069 191 4,926
Other 3,580 121 8 3,709
Other liabilities 7,064 3,372 231 10,667
*
148
Deferred income comprises the following items:

in € million 31. 12. 2014 31. 12. 2013
Total thereof Total thereof
due within due within
one year one year
Deferred income from lease financing 1,685 780 1,774 761

Deferred income relating to service contracts 3,370 1,027 2,855 837
Grants 306 31 193 20
Other deferred income 127 56 104 48
Deferred income 5,488 1,894 4,926 1,666
Deferred income relating to service contracts relates to Berlin are subject to holding periods for the assets con
service and repair work to be provided under commit cerned of up to five years and minimum employment
ments given at the time of the sale of a vehicle (multi- figures. All conditions attached to the grants were com
component arrangements). Grants comprise primarily plied with at 31 December 2014. In accordance with
public sector funds to promote regional structures and IAS 20, grant income is recognised over the useful lives
which have been invested in the production plants in of the assets to which they relate.
Brazil, Leipzig and Berlin. The grants in Leipzig and

90 Income Statements 41 Trade payables
90 Statement of
Comprehensive Income 31 December 2014 Maturity Maturity Maturity Total
92 Balance Sheets in € million within between one later than
Equity
98 Notes
Trade payables 7,580 129 – 7,709
Policies
124 Notes to the Balance Sheet 31 December 2013* Maturity Maturity Maturity Total
149 Other Disclosures in € million within between one later than
165 Segment Information one year and five years five years
*
The total amount of financial liabilities, other liabilities and trade payables with a maturity later than five years
amounts to € 5,442 million (2013: € 3,635 million).
BMW Group
Other Disclosures
42 Contingent liabilities and other financial commitments

Contingent liabilities
No provisions were recognised for the following contingent liabilities (stated at estimated amounts), since an out
flow of resources is not considered to be probable:
in € million 31. 12. 2014 31. 12. 2013
Guarantees 33 33

Performance guarantees 4 4
Other 84 39
Contingent liabilities 121 76
Contingent liabilities relate entirely to non-group options (also including compensation for inflation). In
entities. 2014 an amount of € 350 million (2013: € 320 million)
was recognised as expense in conjunction with operating
Other financial commitments leases. All of these amounts relate to minimum lease
In addition to liabilities, provisions and contingent lia payments.
bilities, the BMW Group also has other financial com
mitments, primarily under lease contracts for land, The total of future minimum lease payments under non-
buildings, plant and machinery, tools, office and other cancellable and other operating leases can be analysed
facilities. The leases run for periods of one to 50 years by maturity as follows:
and in some cases contain extension and / or purchase
in € million 31. 12. 2014 31. 12. 2013

Other financial obligations 1,790 1,774
Other financial commitments include € 7 million (2013: Purchase commitments amounted to € 2,247 million
€ 10 million) in respect of obligations to non-consoli (2013: € 2,661 million) for property, plant and equipment
dated subsidiaries and, as in the previous year, € 1 mil and € 750 million (2013: € 446 million) for intangible
lion for back-to-back operating leases. assets.
150
43 Financial instruments
The carrying amounts and fair values of financial instruments are assigned to IAS 39 categories and cash funds as
follows:1, 2
31 December 2014 Cash funds Loans Held-to-maturity
in € million and receivables investments
Fair value Carrying Fair value Carrying Fair value Carrying

amount amount amount
Assets
Other investments – – – – – –
Receivables from sales financing – – 62,642 61,024 – –
Financial assets
Derivative instruments
Cash flow hedges – – – – – –
Fair value hedges – – – – – –
Other derivative instruments – – – – – –
Marketable securities and investment funds – – 200 200 – –
Loans to third parties – – 12 12 – –
Credit card receivables – – 239 239 – –
Other – – 297 297 – –
Cash and cash equivalents 7,688 7,688 – – – –
90 Income Statements Trade receivables – – 2,153 2,153 – –
90 Statement of Other assets
92 Balance Sheets Receivables from subsidiaries – – 721 721 – –
94 Cash Flow Statements Receivables from companies in which
an investment is held – – 1,055 1,055 – –
Equity
98 Notes Collateral receivables 412 412 – – – –
Other – – 971 971 – –
Policies
116 Notes to the Income Statement Total 8,100 8,100 68,290 66,672 – –
124 Notes to the Balance Sheet 31 December 2014 Cash funds Loans Held-to-maturity
149 Other Disclosures in € million and receivables investments
Liabilities
Financial liabilities
Bonds – – – – – –
Liabilities to banks – – – – – –
Liabilities from customer deposits (banking) – – – – – –
Commercial paper – – – – – –
Asset backed financing transactions – – – – – –
Other – – – – – –
Trade payables – – – – – –
Other liabilities
Payables to subsidiaries – – – – – –
Payables to other companies in which
an investment is held – – – – – –
Other – – – – – –
Total – – – – – –
1
The carrying amounts of cash flow and fair value hedges are allocated to the category “Held for trading” for the sake of clarity.
2
Based on the fact that maturities are generally short, it is assumed for some items that fair value corresponds to the carrying amount.
3
Carrying amount corresponds to market value.
Other liabilities Available- Fair value Held for

for-sale option trading
Fair value Carrying Carrying Carrying Carrying

amount amount 3 amount 3 amount 3
Assets
– – 408 – – Other investments
– – – – – Receivables from sales financing
Financial assets
– – – – 708 Cash flow hedges
– – – – 1,294 Fair value hedges
– – – – 886 Other derivative instruments
– – 3,772 – – Marketable securities and investment funds
– – – – – Loans to third parties
– – – – – Credit card receivables
– – – – – Other
– – – – – Cash and cash equivalents
– – – – – Trade receivables
Other assets
– – – – – Receivables from subsidiaries
Receivables from companies in which
– – – – – an investment is held
– – – – – Collateral receivables
– – – – – Other
– – 4,180 – 2,888 Total


amount amount 3 amount 3 amount1, 3
Liabilities
36,083 35,489 – – – Bonds
11,636 11,554 – – – Liabilities to banks
12,487 12,466 – – – Liabilities from customer deposits (banking)
5,599 5,599 – – – Commercial paper
10,886 10,884 – – – Asset backed financing transactions
– – – – 1,302 Cash flow hedges
– – – – 721 Fair value hedges
– – – – 1,120 Other derivative instruments
1,514 1,514 – – – Other
7,709 7,709 – – – Trade payables
Other liabilities
162 162 – – – Payables to subsidiaries
5 5 – – – an investment is held
4,281 4,281 – – – Other
90,362 89,663 – – 3,143 Total
152
31 December 20131, 2 Cash funds Loans Held-to-maturity


Assets
Other investments – – – – – –
Receivables from sales financing – – 55,536 54,117 – –
Financial assets
Marketable securities and investment funds – – 250 250 – –
Loans to third parties – – 32 32 – –
Credit card receivables – – 222 222 – –
Other – – 825 825 – –
Cash and cash equivalents 7,671 7,671 – – – –
Trade receivables – – 2,449 2,449 – –
Other assets
Receivables from subsidiaries – – 779 779 – –
90 GROUP FINANCIAL S TATEMENTS Receivables from companies in which
90 Income Statements an investment is held – – 950 950 – –
90 Statement of
Collateral receivables 382 382 – – – –
92 Balance Sheets Other – – 172 172 – –
Total 8,053 8,053 61,215 59,796 – –
Equity
98 Notes
31 December 2013 Cash funds Loans Held-to-maturity
Policies
123 Notes to the Statement Fair value Carrying Fair value Carrying Fair value Carrying
of Comprehensive Income amount amount amount
165 Segment Information Liabilities
Bonds – – – – – –
Liabilities to banks – – – – – –
Liabilities from customer deposits (banking) – – – – – –
Commercial paper – – – – – –
Asset backed financing transactions – – – – – –
Other – – – – – –
Trade payables – – – – – –
Other liabilities
Payables to subsidiaries – – – – – –
an investment is held – – – – – –
Other – – – – – –
Total – – – – – –
1
P
2
Based on the fact that maturities are generally short, it is assumed for some items that fair value corresponds to the carrying amount.
3
Carrying amount corresponds to market value.
4
The carrying amounts of cash flow and fair value hedges are allocated to the category “Held for trading” for the sake of clarity.


amount amount 3 amount 3 amount 3 , 4
Assets
– – 553 – – Other investments
– – – – – Receivables from sales financing
Financial assets
– – – – 1,914 Cash flow hedges
– – – – 1,050 Fair value hedges
– – – – 1,049 Other derivative instruments
– – 2,810 – – Marketable securities and investment funds
– – – – – Loans to third parties
– – – – – Credit card receivables
– – – – – Other
– – – – – Cash and cash equivalents
– – – – – Trade receivables
Other assets
– – – – – Receivables from subsidiaries
Receivables from companies in which
– – – – – an investment is held
– – 324 – – Collateral receivables
– – – – – Other
– – 3,687 – 4,013 Total

Fair value 2 Carrying Carrying Carrying Carrying

amount amount 3 amount 3 amount 3 , 4
Liabilities
30,860 30,370 – – – Bonds
8,671 8,590 – – – Liabilities to banks
12,471 12,457 – – – Liabilities from customer deposits (banking)
6,292 6,292 – – – Commercial paper
10,173 10,128 – – – Asset backed financing transactions
– – – – 317 Cash flow hedges
– – – – 321 Fair value hedges
– – – – 465 Other derivative instruments
1,364 1,364 – – – Other
7,485 7,485 – – – Trade payables
Other liabilities
157 157 – – – Payables to subsidiaries
70 70 – – – an investment is held
4,126 4,126 – – – Other
81,669 81,039 – – 1,103 Total
154
Fair value measurement of financial instruments appropriate measurement methods, e. g. discounted cash
The fair values shown are computed using market in flow models. In the latter case, amounts were discounted
formation available at the balance sheet date, on the at 31 December 2014 on the basis of the following inter
basis of prices quoted by the contract partners or using est rates:
ISO Code EUR USD GBP JPY CNY
in %
Interest rate for six months 0.13 0.31 0.68 0.07 4.91
Interest rate for one year 0.16 0.43 0.74 0.14 4.44
Interest rate for five years 0.36 1.78 1.45 0.22 4.16
Interest rate for ten years 0.82 2.31 1.87 0.52 4.22
Interest rates taken from interest rate curves were ad tracts which have matching terms and which can be ob
justed, where necessary, to take account of the credit served on the market.
quality and risk of the underlying financial instrument.
Financial instruments measured at fair value are allo
Derivative financial instruments are measured at their cated to different measurement levels in accordance
fair value. The fair values of derivative financial instru with IFRS 13. This includes financial instruments that
ments are determined using measurement models, as a are
consequence of which there is a risk that the amounts 1. measured at their fair values in an active market for
90 Income Statements calculated could differ from realisable market prices on identical financial instruments (Level 1),
90 Statement of disposal. Observable financial market price spreads are 2. measured at their fair values in an active market for
92 Balance Sheets taken into account in the measurement of derivative comparable financial instruments or using measure
financial instruments. The supply of data to the model ment models whose main input factors are based on
Equity used to calculate fair values also takes account of tenor observable market data (Level 2), or
98 Notes
and currency basis spreads, thus helping to minimise 3. using input factors not based on observable market
Policies differences between the carrying amounts of the instru data (Level 3).
ments and the amounts that can be realised on the finan
of Comprehensive Income cial markets on their disposal. In addition, the Group’s The following table shows the amounts allocated to
149 Other Disclosures own default risk and that of counterparties is taken into each measurement level at the end of the reporting
165 Segment Information account in the form of credit default swap (CDS) con period:
31 December 2014 Level hierarchy in accordance with IFRS 13
in € million Level 1 Level 2 Level 3
Marketable securities, investment fund shares and collateral assets – available-for-sale 3,772 – –
Other investments – available-for-sale 231 – –
Derivative instruments (assets)
Cash flow hedges – 708 –
Fair value hedges – 1,294 –
Other derivative instruments – 886 –
Derivative instruments (liabilities)
Cash flow hedges – 1,302 –
Fair value hedges – 721 –
Other derivative instruments – 1,120 –
31 December 2013 Level hierarchy in accordance with IFRS 13

in € million Level 1 Level 2 Level 3
Marketable securities, investment fund shares and collateral assets – available-for-sale 3,134 – –
Other investments – available-for-sale 379 – –
Derivative instruments (assets)
Cash flow hedges – 1,914 –
Fair value hedges – 1,050 –
Other derivative instruments – 1,049 –
Derivative instruments (liabilities)
Cash flow hedges – 317 –
Fair value hedges – 321 –
Other derivative instruments – 465 –
Other investments (available-for-sale) amounting to poses, this was achieved using the discounted cash flow
€ 177 million (2013: € 174 million) are measured at amor method and taking account of the BMW Group’s own
tised cost since quoted market prices are not available default risk; for this reason, the fair values calculated can
or cannot be determined reliably. These are therefore be allocated to Level 2.
not included in the level hierarchy shown above. In
addition, other investments amounting to € 231 million Offsetting of financial instruments
(2013: € 379 million) are measured at fair value since In the BMW Group, financial assets and liabilities relat
quoted market prices are available. These items are in ing to derivative financial instruments would normally
cluded in Level 1. be required to be offset. No offsetting takes place for ac
counting purposes, however, since the necessary crite
As in the previous year, there were no reclassifications ria are not met. Since legally enforceable master netting
within the level hierarchy during the financial year 2014. agreements or similar contracts are in place, actual off
setting would be possible in principle, for instance in
In situations where a fair value was required to be meas the case of insolvency. Offsetting would have the follow
ured for a financial instrument only for disclosure pur ing impact on the carrying amounts of derivatives:
in € million 31. 12. 2014 31. 12. 2013
Reported on Reported on Reported on Reported on
assets side equity and assets side equity and
liabilities side liabilities side
Balance sheet amounts as reported 2,888 3,143 4,013 1,103

Gross amount of derivatives which can be offset in case of insolvency – 1,228 – 1,228 – 710 – 710
Net amount after offsetting 1,660 1,915 3,303 393
156
Gains and losses on financial instruments

The following table shows the net gains and losses arising for each of the categories of financial instrument defined
by IAS 39:
Held for trading

Gains / losses from the use of derivative instruments – 971 571
Available-for-sale
Gains and losses on sale and fair value measurement of marketable securities held for sale
(including investments in subsidiaries and participations measured at cost) – 65 – 57
Net income from participations and investments 3 10
Accumulated other equity
Balance at 1 January 135 108
Total change during the year 6 27
thereof recognised in the income statement during the period under report – 69 – 40
Balance at 31 December 141 135
Loans and receivables
Impairment losses / reversals of impairment losses – 278 – 310
Other income / expenses – 506 126
Other liabilities
Income / expenses 238 – 235
90 Statement of
92 Balance Sheets Gains / losses from the use of derivatives relate pri The disclosure of interest income resulting from the un
marily to fair value gains or losses arising on stand-alone winding of interest on future expected receipts would
Equity derivatives. normally only be relevant for the BMW Group where as
98 Notes
sets have been discounted as part of the process of de
Policies Net interest income from interest rate and interest termining impairment losses. However, as a result of the
rate / currency swaps amounted to € 101 million (2013: assumption that most of the income that is subsequently
of Comprehensive Income € 126 million). recovered is received within one year and the fact that
149 Other Disclosures the impact is not material, the BMW Group does not dis
165 Segment Information Impairment losses of € 152 million (2013: € 73 million) count assets for the purposes of determining impairment
were recognised in the income statement in 2014 on losses.
available-for-sale securities accounted for as participa
tions, for which fair value changes had previously been Cash flow hedges
recognised directly in equity. Reversals of impairment The effect of cash flow hedges on accumulated other
losses on marketable securities amounting to € 7 million equity was as follows:
(2013: € 70 million) were recognised directly in equity.
Balance at 1 January 1,136 202

Total changes during the year – 1,616 934
thereof reclassified to the income statement – 255 – 179
Balance at 31 December – 480 1,136
Fair value gains and losses recognised on derivatives and of cash flow hedges amounting to € 27 million were rec
recorded initially in accumulated other equity are re ognised in “Financial Result” (2013: gains of € 8 million).
classified to cost of sales when the derivatives mature. Losses of € 6 million (2013: € – million) arising in con
nection with forecasting errors relating to cash flow
As in the previous year, no gains / losses were recognised hedges for commodities and gains of € 6 million (2013:
in “Financial Result” in 2014 in connection with fore loss of € 8 million) attributable to the ineffective portion
casting errors and the resulting over-hedging of currency of commodity hedges were recognised in “Financial
exposures. Losses attributable to the ineffective portion Result” in 2014.
At 31 December 2014 the BMW Group held derivative in the same periods over which the relevant interest
financial instruments (mainly forward currency and op rates are fixed. It is expected that € 1 million of net
tion contracts) with terms of up to 60 months (2013: losses, recognised in equity at the end of the reporting
60 months) in order to hedge currency risks attached to period, will be reclassified to profit and loss in the new
future transactions. These derivative instruments are financial year (2013: € – million).
intended to hedge forecast sales denominated in a for
eign currency over the coming 60 months. The income At 31 December 2014 the BMW Group held derivative
statement impact of the hedged cash flows will be rec financial instruments (mostly commodity swaps) with
ognised as a general rule in the same periods in which terms of up to 59 months (2013: 60 months) to hedge
external revenues are recognised. It is expected that raw materials price risks attached to future transactions
€ 278 million of net losses, recognised in equity at the over the coming 59 months. The income statement im
end of the reporting period, will be reclassified to profit pact of the hedged cash flows will be recognised as a
and loss in the new financial year (2013: net gains of general rule in the same period in which the derivative
€ 162 million). instruments mature. It is expected that € 54 million of
net losses, recognised in equity at the end of the report
At 31 December 2014 the BMW Group held derivative ing period, will be reclassified to profit and loss in the
financial instruments (mostly interest rate swaps) with new financial year (2013: € 60 million).
terms of up to one month (2013: 13 months) to hedge
interest rate risks. These derivative instruments are in Fair value hedges
tended to hedge interest-rate risks arising on financial The following table shows gains and losses on hedging
instruments with variable interest payments within instruments and hedged items which are deemed to be
the coming month. The income statement impact of the part of a fair value hedge relationship:
hedged cash flows will be recognised as a general rule
in € million 31. 12. 2014 31. 12. 2013
Gains / losses on hedging instruments designated as part of a fair value hedge relationship 369 – 525
Gains / losses from hedged items – 359 503
Ineffectiveness of fair value hedges 10 – 22
The difference between the gains / losses on hedging counterparty obtained or historical data based on the
instruments (mostly interest rate swaps) and the results existing business relationship (i. e. payment patterns to
recognised on hedged items represents the ineffective date) reviewed in order to minimise the credit risk, all
portion of fair value hedges. depending on the nature and amount of the exposure
that the BMW Group is proposing to enter into.
Fair value hedges are mainly used to hedge the market
prices of bonds, other financial liabilities and receivables Within the financial services business, the financed
from sales financing. items (e. g. vehicles, equipment and property) in the re
tail customer and dealer lines of business serve as first-
Bad debt risk ranking collateral with a recoverable value. Security is
Notwithstanding the existence of collateral accepted, also put up by customers in the form of collateral asset
the carrying amounts of financial assets generally take pledges, asset assignment and first-ranking mortgages,
account of the maximum credit risk arising from the supplemented where appropriate by warranties and
possibility that the counterparties will not be able to ful guarantees. If an item previously accepted as collateral
fil their contractual obligations. The maximum credit risk is acquired, it undergoes a multi-stage process of repos
for irrevocable credit commitments relating to credit session and disposal in accordance with the legal situa
card business amounts to € 1,181 million (2013: € 943 mil tion prevailing in the relevant market. The assets in
lion). The equivalent figure for dealer financing is volved are generally vehicles which can be converted
€ 22,025 million (2013: € 19,856 million). into cash at any time via the dealer organisation.
In the case of performance relationships underlying Impairment losses are recorded as soon as credit risks
non-derivative financial instruments, collateral will be are identified on individual financial assets, using a
required, information on the credit-standing of the methodology specifically designed by the BMW Group.
158
More detailed information regarding this methodology enters into such contracts with parties of first-class
is provided in the section on accounting policies (note 6). credit standing. The general credit risk on derivative
financial instruments utilised by the BMW Group is
Creditworthiness testing is an important aspect of the therefore not considered to be significant.
BMW Group’s credit risk management. Every borrower’s
creditworthiness is tested for all credit financing and A concentration of credit risk with particular borrowers
lease contracts entered into by the BMW Group. In the or groups of borrowers has not been identified in con
case of retail customers, creditworthiness is assessed junction with financial instruments.
using validated scoring systems integrated into the pur
chasing process. In the area of dealer financing, credit Further disclosures relating to credit risk – in particular
worthiness is assessed by means of ongoing credit with regard to the amounts of impairment losses recog
monitoring and an internal rating system that takes ac nised – are provided in the explanatory notes to the
count not only of the tangible situation of the borrower relevant categories of receivables in notes 28, 29 and 33.
but also of qualitative factors such as past reliability in
business relations. Liquidity risk
The following table shows the maturity structure of ex
The credit risk relating to derivative financial instru pected contractual cash flows (undiscounted) for finan
ments is minimised by the fact that the Group only cial liabilities:
90 Statement of Bonds 9,266 23,786 4,232 37,284
92 Balance Sheets Liabilities to banks 8,110 3,432 489 12,031
Equity Commercial paper 5,601 – – 5,601
98 Notes
Policies Derivative instruments 2,100 1,317 1 3,418
of Comprehensive Income Other financial liabilities 177 434 500 1,111
149 Other Disclosures Total 45,942 39,785 5,299 91,026

Bonds 7,933 21,434 3,043 32,410

Derivative instruments 426 659 80 1,165
Other financial liabilities 210 361 367 938
Total 39,051 37,834 3,648 80,533
The cash flows shown comprise principal repayments that have a negative fair value at the balance sheet date.
and the related interest. The amounts disclosed for de At 31 December 2014 irrevocable credit commitments
rivatives comprise only cash flows relating to derivatives to dealers which had not been called upon at the end of
the reporting period amounted to € 7,247 million (2013: maining after netting. Financial instruments are only
€ 6,760 million). used to hedge underlying positions or forecast trans
actions.
Solvency is assured at all times by managing and moni
toring the liquidity situation on the basis of a rolling The scope of permitted transactions, responsibilities,
cash flow forecast. The resulting funding requirements financial reporting procedures and control mechanisms
are secured by a variety of instruments placed on the used for financial instruments are set out in internal
world’s financial markets. The objective is to minimise guidelines. This includes, above all, a clear separation of
risk by matching maturities for the Group’s financing duties between trading and processing. Currency, inter
requirements within the framework of the target debt est rate and raw materials price risks of the BMW Group
structure. The BMW Group has good access to capital are managed at a corporate level.
markets as a result of its solid financial position and a
diversified refinancing strategy. This is underpinned by Further information is provided in the “Report on out
the longstanding long- and short-term ratings issued look, risks and opportunities” section of the Combined
by Moody’s and Standard & Poor’s. Management Report.
Short-term liquidity is managed primarily by issuing Currency risks

money market instruments (commercial paper). In this As an enterprise with worldwide operations, business
area too, competitive refinancing conditions can be is conducted in a variety of currencies, from which cur
achieved thanks to Moody’s and Standard & Poor’s short- rency risks arise. Since a significant portion of Group
term ratings of P-1 and A-1 respectively. revenues is generated outside the euro currency region
and the procurement of production material and fund
Also reducing liquidity risk, additional secured and ing is also organised on a worldwide basis, the currency
unsecured lines of credit are in place with first-class in risk is an extremely important factor for Group earnings.
ternational banks, including a syndicated credit line
totalling € 6 billion (2013: € 6 billion). Intra-group cash At 31 December 2014 derivative financial instruments,
flow fluctuations are evened out by the use of daily cash mostly in the form of forward currency and option con
pooling arrangements. tracts, were in place to hedge the main currencies.
Market risks A description of the management of this risk is pro

The principal market risks to which the BMW Group vided in the Combined Management Report. The BMW
is exposed are currency risk, interest rate risk and raw Group measures currency risk using a cash-flow-at-risk
materials price risk. model.
Protection against such risks is provided in the first in The starting point for analysing currency risk with this
stance through natural hedging which arises when model is the identification of forecast foreign currency
the values of non-derivative financial instruments have transactions or “exposures”. At the end of the reporting
matching maturities and amounts (netting). Derivative period, the principal exposures for the relevant coming
financial instruments are used to reduce the risk re year were as follows:
in € million 31. 12. 2014 31. 12. 2013
Euro / Chinese Renminbi 10,937 10,691

Euro / US Dollar 4,743 4,401
Euro / British Pound 4,818 3,852
Euro / Russian Rouble 758 1,738
Euro / Japanese Yen 1,004 1,469
160
In the next stage, these exposures are compared to all dence level of 95 % and a holding period of up to one
hedges that are in place. The net cash flow surplus rep year. Correlations between the various currencies are
resents an uncovered risk position. The cash-flow-at- taken into account when the risks are aggregated, thus
risk approach involves allocating the impact of potential reducing the overall risk.
exchange rate fluctuations to operating cash flows on
the basis of probability distributions. Volatilities and The following table shows the potential negative impact
correlations serve as input factors to assess the relevant for the BMW Group – measured on the basis of the
probability distributions. cash-flow-at-risk approach – attributable to unfavoura
ble changes in exchange rates. The impact for the prin
The potential negative impact on earnings is computed cipal currencies, in each case for the following financial
for each currency for the following financial year on the year, is as follows:
basis of current market prices and exposures to a confi
in € million 31. 12. 2014 31. 12. 2013
Euro / Chinese Renminbi 173 197

Euro / US Dollar 73 65
Euro / British Pound 66 80
Euro / Russian Rouble 160 109
Euro / Japanese Yen 6 44

90 Income Statements Currency risk for the BMW Group is concentrated on These risks arise when funds with differing fixed-rate
90 Statement of the currencies referred to above. periods or differing terms are borrowed and invested. All
92 Balance Sheets items subject to, or bearing, interest are exposed to in
Interest rate risks terest rate risk. Interest rate risks can affect either side
Equity The BMW Group’s financial management system involves of the balance sheet.
98 Notes
the use of standard financial instruments such as short-
Policies term deposits, investments in variable and fixed-income The fair values of the Group’s interest rate portfolios for
securities as well as securities funds. The BMW Group the five main currencies were as follows at the end of the
of Comprehensive Income is therefore exposed to risks resulting from changes in reporting period:
149 Other Disclosures interest rates.
in € million 31. 12. 2014 31. 12. 2013
Euro* 17,535 16,495

US Dollar 12,087 11,931
British Pound 5,091 3,960
Chinese Renminbi 574 1,787
Japanese Yen 113 189
*
Prior year figures amended for one additional interest-bearing exposure.
Interest rate risks can be managed by the use of interest and to manage interest rate risks. This is based on a
rate derivatives. The interest rate contracts used for state-of-the-art historical simulation, in which the
hedging purposes comprise mainly swaps which are ac potential future fair value losses of the interest rate
counted for on the basis of whether they are designated portfolios are compared across the Group with ex
as a fair value hedge or as a cash flow hedge. A descrip pected amounts measured on the basis of a holding
tion of the management of interest rate risks is provided period of 250 days and a confidence level of 99.98 %.
in the Combined Management Report. Aggregation of these results creates a risk reduction
effect due to correlations between the various port
As stated there, the BMW Group applies a group-wide folios.
value-at-risk approach for internal reporting purposes
In the following table the potential volumes of fair value approach – are compared with the expected value for
fluctuations – measured on the basis of the value-at-risk the interest-rate-sensitive exposures of the BMW Group:
in € million 31. 12. 2014 31. 12. 2013
Euro* 398 363

US Dollar 347 246
British Pound 108 62
Chinese Renminbi 44 11
Japanese Yen 11 6
*
Prior year figures amended for the value-at-risk of one additional interest-bearing exposure.
Raw materials price risk The first step in the analysis of the raw materials price
The BMW Group is exposed to the risk of price fluctua risk is to determine the volume of planned purchases
tions for raw materials. A description of the management of raw materials (and components containing those raw
of these risks is provided in the Combined Management materials). These amounts, which represent the gross
Report. exposure, were as follows at each reporting date for the
following financial year:
in € million 31. 12. 2014 31. 12. 2013
Raw materials price exposures 3,770 4,550
In the next stage, these exposures are compared to all and exposure to a confidence level of 95 % and a hold
hedges that are in place. The net cash flow surplus ing period of up to one year. Correlations between the
represents an uncovered risk position. The cash-flow-at- various categories of raw materials are taken into ac
risk approach involves allocating the impact of potential count when the risks are aggregated, thus reducing the
raw materials fluctuations to operating cash flows on overall risk.
the basis of probability distributions. Volatilities and cor
relations serve as input factors to assess the relevant The following table shows the potential negative impact
probability distributions. for the BMW Group – measured on the basis of the cash-
flow-at-risk approach – attributable to fluctuations in
The potential negative impact on earnings is com prices across all categories of raw materials. The risk at
puted for each raw material category for the following each reporting date for the following financial year was
financial year on the basis of current market prices as follows:
in € million 31. 12. 2014 31. 12. 2013
Cash flow at risk 230 405
44 Explanatory notes to the cash flow statements bank, to the extent that they are available within three
The cash flow statements show how the cash and cash months from the end of the reporting period and are
equivalents of the BMW Group and of the Automotive subject to an insignificant risk of changes in value.
and Financial Services segments have changed in the
course of the year as a result of cash inflows and cash The cash flows from investing and financing activities
outflows. In accordance with IAS 7 (Statement of Cash are based on actual payments and receipts. By con
Flows), cash flows are classified into cash flows from trast, the cash flow from operating activities is derived
operating, investing and financing activities. indirectly from the net profit for the year. Under this
method, changes in assets and liabilities relating to
Cash and cash equivalents included in the cash flow operating activities are adjusted for currency translation
statement comprise cash in hand, cheques, and cash at effects and changes in the composition of the Group.
162
The changes in balance sheet positions shown in the lessor) is also reported within cash flows from operating
cash flow statement do not therefore agree directly with activities.
the amounts shown in the Group and segment balance
sheets. Income taxes paid and interest received are classified
as cash flows from operating activities in accordance
Cash inflows and outflows relating to operating leases, with IAS 7.31 and IAS 7.35. Interest paid is presented
where the BMW Group is the lessor, are aggregated and on a separate line within cash flows from financing ac
shown on the line “Change in leased products” within tivities. Dividends received in the financial year 2014
cash flows from operating activities. amounted to € 1 million (2013: € 4 million).
The net change in receivables from sales financing (in

cluding finance leases, where the BMW Group is the
45 Related party relationships with these companies are small in scale, arise in the
In accordance with IAS 24 (Related Party Disclosures), normal course of business and are conducted on the
related individuals or entities which have the ability to basis of arm’s length principles.
control the BMW Group or which are controlled by the
BMW Group, must be disclosed unless such parties are Transactions of BMW Group companies with the joint
already included in the Group Financial Statements of venture BMW Brilliance Automotive Ltd., Shenyang,
BMW AG as consolidated companies. Under the con all arise in the normal course of business and are con
90 Income Statements trol concept established in IFRS 10, an investor controls ducted on the basis of arm’s length principles. Group
90 Statement of another entity when it is exposed to or has rights to companies sold goods and services to BMW Brilliance
92 Balance Sheets variable returns from its involvement with the investee Automotive Ltd., Shenyang, during the financial year
and has the ability to affect those returns through its under report for an amount of € 4,417 million (2013:
Equity power over the investee. € 3,588 million). At 31 December 2014, receivables of
98 Notes
Group companies from BMW Brilliance Automotive
Policies In addition, the disclosure requirements of IAS 24 also Ltd., Shenyang, totalled € 943 million (2013: € 898 mil
cover transactions with associated companies, joint lion). Group companies had no payables to BMW
of Comprehensive Income ventures, joint operations and individuals that have the Brilliance Automotive Ltd., Shenyang, at the end of
149 Other Disclosures ability to exercise significant influence over the finan the reporting period (2013: € 66 million). Group compa
165 Segment Information cial and operating policies of the BMW Group. This also nies received goods and services from BMW Brilliance
includes close relatives and intermediary entities. Sig Automotive Ltd., Shenyang, in 2014 for an amount of
nificant influence over the financial and operating poli € 34 million (2013: € 31 million).
cies of the BMW Group is presumed when a party holds
20 % or more of the voting power of BMW AG. In addi All relationships of BMW Group entities with the joint
tion, the requirements contained in IAS 24 relating to ventures DriveNow GmbH & Co. KG, Munich, and
key management personnel and close members of their DriveNow Verwaltungs GmbH, Munich, are conducted
families or intermediary entities are also applied. In the on the basis of arm’s length principles. Transactions
case of the BMW Group, this applies to members of the with these entities arise in the normal course of business
Board of Management and Supervisory Board. and are small in scale.
In the financial year 2014, the disclosure requirements Transactions of Group companies with SGL Automotive
contained in IAS 24 affect the BMW Group with re Carbon Fibers GmbH & Co. KG, Munich, SGL Auto
gard to business relationships with non-consolidated motive Carbon Fibers Verwaltungs GmbH, Munich, and
subsidiaries, joint ventures, joint operations and asso SGL Automotive Carbon Fibers LLC, Dover, DE, were
ciated companies as well as with members of the Board reported in their entirety in the Group Financial State
of Management and Supervisory Board of BMW AG. ments until 1 January 2014. As a result of the first-time
application of IFRS 11 (Joint Arrangements) in the finan
The BMW Group maintains normal business relation cial year 2014, these entities are now consolidated, as
ships with non-consolidated subsidiaries. Transactions joint operations, on a proportionate basis (49 %) and
the appropriate portion of transactions eliminated on electromobility. The focus of this collaboration is on
consolidation. The remaining 51 % of the transactions providing complete photovoltaic solutions for rooftop
continue to be reported in the Group Financial State systems and carports to BMW i customers. Solarwatt
ments (non-consolidated portion) and are described be GmbH, Dresden, leased vehicles from the BMW Group
low. Prior year figures have been adjusted accordingly. in 2014. The service, cooperation and lease contracts
All relationships with the joint operations are attributa referred to above are not material for the BMW Group.
ble to the ordinary activities of the entities concerned. They all arise in the normal course of business and are
All transactions were conducted on the basis of arm’s conducted on the basis of arm’s length principles.
length principles. At 31 December 2014, loans receiva
ble from the joint operations amounted to € 111 million Susanne Klatten is a shareholder and member of the
(2013*: € 52 million). Interest income recognised on Supervisory Board of BMW AG and also a shareholder
these loans amounted to € 2.4 million (2013*: € 1.4 mil and Deputy Chairman of the Supervisory Board of
lion) in the financial year 2014. Goods and services re Altana AG, Wesel. Altana AG, Wesel, acquired vehicles
ceived by Group companies from the joint operations from the BMW Group during the financial year 2014,
during the twelve-month period totalled € 62 million mostly in the form of lease contracts. These contracts
(2013*: € 18 million). Amounts payable to the joint oper are not material for the BMW Group, arise in the course
ations at the end of the reporting period totalled € 5 mil of ordinary activities and are made, without exception,
lion (2013*: € 4 million). on the basis of arm’s length principles.
The BMW Group maintains normal business relation Apart from vehicle lease contracts concluded on an
ships with associated companies. Transactions with arm’s length basis, companies of the BMW Group have
these companies are small in scale, arise in the normal not entered into any contracts with members of the
course of business and are conducted on the basis of Board of Management or Supervisory Board of BMW
arm’s length principles. AG. The same applies to close members of the families
of those persons.
Stefan Quandt is a shareholder and Deputy Chairman
of the Supervisory Board of BMW AG. He is also the BMW Trust e.V., Munich, administers assets on a trustee
sole shareholder and Chairman of the Supervisory basis to secure obligations relating to pensions and
Board of DELTON AG, Bad Homburg v. d. H., which, via pre-retirement part-time work arrangements in Germany
its subsidiaries, performed logistic-related services for and is therefore a related party of the BMW Group in
the BMW Group during the financial year 2014. In addi accordance with IAS 24. This entity, which is a registered
tion, companies of the DELTON Group used vehicles association (eingetragener Verein) under German law,
provided by the BMW Group, mostly in the form of does not have any assets of its own. It did not have any
leasing contracts. Stefan Quandt is also the indirect ma income or expenses during the period under report.
jority shareholder of Solarwatt GmbH, Dresden. Co BMW AG bears expenses on a minor scale and renders
operation arrangements are in place between BMW AG services on behalf of BMW Trust e. V., Munich.
and Solarwatt GmbH, Dresden, within the field of *
46 Declaration with respect to the Corporate pursuant to § 161 of the German Stock Corporation
Governance Code Act. It is reproduced in the Annual Report 2014 of the
The Board of Management and the Supervisory Board BMW Group and is also available to shareholders on
of Bayerische Motoren Werke Aktiengesellschaft the BMW Group website at www.bmwgroup.com / ir.
have issued the prescribed Declaration of Compliance
47 Shareholdings of members of the Board of Management 16.07 %) relates to Stefan Quandt, Germany, and 11.54 %
and Supervisory Board (2013: 11.55 %) to Susanne Klatten, Germany. As at
The members of the Supervisory Board of BMW AG hold the end of the previous financial year, shareholdings of
in total 27.61 % (2013: 27.62 %) of the issued common members of the BMW AG Board of Management account,
and preferred stock shares, of which 16.06 % (2013: in total, for less than 1 % of issued shares.
164
48 Compensation of members of the Board of

Management and Supervisory Board
The total compensation of the current members of the BMW AG for the financial year 2014 amounted to € 46.1
Board of Management and the Supervisory Board of million (2013: € 43.4 million) and comprised the following:
Short-term employment benefits 39.5 38.4

Share-based remuneration component 1.0 0.7
Post-employment benefits 2.1 2.2
Benefits in conjunction with the termination of an employment relationship 3.5 2.1
Compensation 46.1 43.4
The total compensation of the current Board of Manage Pension obligations to former members of the Board
ment members for 2014 amounted to € 35.7 million (2013: of Management and their surviving dependants are
€ 34.5 million). This comprised fixed components of covered by pension provisions amounting to € 68.4 mil
€ 7.7 million (2013: € 7.9 million), variable components of lion (2013: € 58.0 million), computed in accordance with
€ 27.0 million (2013: € 25.9 million) and a share-based IAS 19.
compensation component totalling € 1.0 million (2013:
€ 0.7 million). Pension obligations to current members of The compensation systems for members of the Super
the Board of Management are covered by provisions visory Board do not include any stock options, value
90 Income Statements amounting to € 31.3 million (2013: € 24.8 million), com appreciation rights comparable to stock options or any
90 Statement of puted in accordance with IAS 19 (Employee Benefits). other stock-based compensation components. Apart
92 Balance Sheets from vehicle lease contracts entered into on customary
The compensation of the members of the Supervisory market conditions, no advances or loans were granted to
Equity Board for the financial year 2014 amounted to € 4.8 mil members of the Board of Management and the Super
98 Notes
lion (2013: € 4.6 million). This comprised fixed compo visory Board, nor were any contingent liabilities entered
Policies nents of € 2.0 million (2013: € 2.0 million) and variable into on their behalf.
components of € 2.8 million (2013: € 2.6 million).
of Comprehensive Income Further details about the remuneration of current mem
149 Other Disclosures The remuneration of former members of the Board bers of the Board of Management and the Supervisory
165 Segment Information of Management and their dependants amounted to Board can be found in the Compensation Report, which
€ 5.8 million (2013: € 4.7 million). is part of the Combined Management Report.
49 Application of exemption provisions The following German entities apply the exemption
A number of companies and incorporated partnerships available in § 264 ( 3) and § 264 b HGB with regard to
(as defined by § 264 a HGB) which are consolidated sub publication:
sidiaries of BMW AG and for which the Group Financial – Bavaria Wirtschaftsagentur GmbH, Munich
Statements of BMW AG represent exempting consoli – Alphabet International GmbH, Munich
dated financial statements, apply the exemptions available – BMW Hams Hall Motoren GmbH, Munich
in § 264 (3) and § 264b HGB with regard to the drawing – BMW M GmbH Gesellschaft für individuelle
up of a management report. The exemptions have been Automobile, Munich
applied by: – BMW INTEC Beteiligungs GmbH, Munich
– Bavaria Wirtschaftsagentur GmbH, Munich – BMW Verwaltungs GmbH, Munich
– BMW Fahrzeugtechnik GmbH, Eisenach – Rolls-Royce Motor Cars GmbH, Munich
– BMW Hams Hall Motoren GmbH, Munich – BMW Beteiligungs GmbH & Co. KG, Munich
– BMW M GmbH Gesellschaft für individuelle
Automobile, Munich In addition, the Dutch entity, BMW International
– Rolls-Royce Motor Cars GmbH, Munich Holding B. V., The Hague, applies the exemption pro
vision contained in Article 2:403 of the Civil Code
of the Netherlands.
BMW Group
Segment Information
50 Explanatory notes to segment information Internal management and reporting

Information on reportable segments Segment information is prepared in conformity with
For the purposes of presenting segment information, the accounting policies adopted for preparing and
the activities of the BMW Group are divided into oper presenting the Group Financial Statements. Excep
ating segments in accordance with IFRS 8 (Operating tions to this general principle is the treatment of inter-
Segments). Operating segments are identified on the segment warranties (the earnings impact of which
same basis that is used internally to manage and report is allocated to the Automotive and Financial Services
on performance and takes account of the organisational segments on the basis used internally to manage the
structure of the BMW Group based on the various prod business) and cross-segment impairment losses on
ucts and services of the reportable segments. investments in subsidiaries. Inter-segment receivables
and payables, provisions, income, expenses and profits
The activities of the BMW Group are broken down into are eliminated in the column “Eliminations”. Inter-
the operating segments Automotive, Motorcycles, Finan segment sales take place at arm’s length prices.
cial Services and Other Entities.
The role of “chief operating decision maker” with respect
The Automotive segment develops, manufactures, as to resource allocation and performance assessment of
sembles and sells cars and off-road vehicles, under the the reportable segment is embodied in the full Board of
brands BMW, MINI and Rolls-Royce as well as spare Management. In order to assist the decision-taking pro
parts and accessories. BMW and MINI brand products cess, various measures of segment performance as well
are sold in Germany through branches of BMW AG as segment assets have been set for the various operat
and by independent, authorised dealers. Sales outside ing segments.
Germany are handled primarily by subsidiary com
panies and, in a number of markets, by independent The performance of the Automotive and Motorcycles
import companies. Rolls-Royce brand vehicles are sold segments is managed on the basis of return on capital
in the USA, China and Russia via subsidiary companies employed (RoCE). The relevant measure of segment
and elsewhere by independent, authorised dealers. results used is therefore profit before financial result.
Capital employed is the corresponding measure of seg
The BMW Motorcycles segment develops, manufac ment assets used to determine how to allocate resources
tures, assembles and sells motorcycles as well as spare and comprises all current and non-current operational
parts and accessories. assets after deduction of liabilities used operationally
which are not subject to interest (e. g. trade payables).
The principal lines of business of the Financial Services
segment are car leasing, fleet business, multi-brand busi The performance of the Financial Services segment is
ness, retail customer and dealer financing, customer de measured on the basis of return on equity (RoE), with
posit business and insurance activities. profit before tax therefore representing the measure of
segment result used. For this reason, the measure of
Holding and Group financing companies are included in segment assets in the Financial Services segment corre
the Other Entities segment. This segment also includes sponds to net assets, defined as total assets less total
operating companies – BMW Services Ltd., Farnborough, liabilities.
BMW (UK) Investments Ltd., Farnborough, Bavaria Lloyd
Reisebüro GmbH, Munich, and MITEC Mikroelektronik The performance of the Other Entities segment is as
Mikrotechnik Informatik GmbH, Munich, – which are sessed on the basis of profit or loss before tax. The
not allocated to one of the other segments. corresponding measure of segment assets used to
manage the Other Entities segment is total assets less
tax assets and intragroup investments.
166
Segment information by operating segment is as follows:

Segment information by operating segment
Automotive Motorcycles
in € million 2014 2013* 2014 2013
External revenues 59,654 56,286 1,671 1,495

Inter-segment revenues 15,519 14,344 8 9
Total revenues 75,173 70,630 1,679 1,504
Segment result 7,244 6,649 112 79

Income from equity accounted investments 655 407 – –
Capital expenditure on non-current assets 6,022 6,659 69 85
Depreciation and amortisation on non-current assets 4,080 3,657 64 65
*
Automotive Motorcycles
90 Income Statements in € million 31. 12. 2014 31. 12. 2013* 31. 12. 2014 31. 12. 2013
90 Statement of
92 Balance Sheets Segment assets 11,489 10,318 575 488
96 Group Statement of Changes in Investments accounted for using the equity method 1,088 638 – –
Equity
98 Notes *
Policies
Financial Other Entities Reconciliation to Group

Services Group figures
2014 2013* 2014 2013 2014 2013* 2014 2013*
19,073 18,276 3 2 – – 80,401 76,059 External revenues

1,526 1,598 4 4 – 17,057 – 15,955 – – Inter-segment revenues
20,599 19,874 7 6 – 17,057 – 15,955 80,401 76,059 Total revenues
1,723 1,619 154 164 – 526 – 618 8,707 7,893 Segment result
– – – – – – 655 407 Income from equity accounted investments
19,206 17,484 – – – 4,621 – 4,325 20,676 19,903 Capital expenditure on non-current assets
7,539 7,021 – – – 4,112 – 3,787 7,571 6,956 Depreciation and amortisation on non-current assets
Financial Other Entities Reconciliation to Group

Services Group figures
31. 12. 2014 31. 12. 2013* 31. 12. 2014 31. 12. 2013* 31. 12. 2014 31. 12. 2013* 31. 12. 2014 31. 12. 2013*
9,357 8,388 61,516 55,300 71,866 63,883 154,803 138,377 Segment assets
– – – – – – 1,088 638 Investments accounted for using the equity method
168
Write-downs on inventories to their net realisable value recognised on leased products. Reversals of impair
amounting to € 29 million (2013: € 28 million) were recog ment losses amounted to € 169 million.
nised by the Automotive segment in the financial year
2014. Reversals of write-downs during the same period The Other Entities segment result includes interest
amounted to € 3 million (2013: € 4 million). and similar income amounting to € 1,295 million (2013:
€ 1,340 million) and interest and similar expenses
Impairment losses on other investments amounting to amounting to € 1,197 million (2013: € 1,279 million). The
€ 153 million (2013: € 84 million) relating to the Automo segment result was not impacted by any impairment
tive segment were recognised as part of the financial losses in the financial year 2014 (2013: € 7 million).
result and are therefore not included in segment result.
The information disclosed for capital expenditure and
Interest and similar income of the Financial Services depreciation and amortisation relates to non-current
segment is a component of segment result and totalled property, plant and equipment, intangible assets and
€ 4 million (2013: € 5 million). Interest and similar ex leased products.
penses of the Financial Services segment amounted to
€ 29 million (2013*: € 27 million). Segment figures can be reconciled to the corresponding
Group figures as follows:
Financial Services segment result was negatively im
pacted by impairment losses totalling € 268 million
in € million 2014 2013 *
Reconciliation of segment result
90 Statement of
Comprehensive Income Total for reportable segments 9,233 8,511
92 Balance Sheets
Financial result of Automotive segment and Motorcycles segment – 363 – 91
96 Group Statement of Changes in Elimination of inter-segment items – 163 – 527
Equity
98 Notes Group profit before tax 8,707 7,893
Policies
116 Notes to the Income Statement Reconciliation of capital expenditure on non-current assets
123 Notes to the Statement Total for reportable segments 25,297 24,228
124 Notes to the Balance Sheet Elimination of inter-segment items – 4,621 – 4,325
Total Group capital expenditure on non-current assets 20,676 19,903
Reconciliation of depreciation and amortisation on non-current assets

Total for reportable segments 11,683 10,743
Elimination of inter-segment items – 4,112 – 3,787
Total Group depreciation and amortisation on non-current assets 7,571 6,956
in € million 31. 12. 2014 31. 12. 2013 *
Reconciliation of segment assets

Total for reportable segments 82,937 74,494
Non-operating assets – Other Entities segment 6,658 5,989
Operating liabilities – Financial Services segment 96,959 83,942
Interest-bearing assets – Automotive and Motorcycles segments 39,449 37,357
Liabilities of Automotive and Motorcycles segments not subject to interest 28,488 25,473
Elimination of inter-segment items – 99,688 – 88,878
Total Group assets 154,803 138,377
*
In the case of information by geographical region, exter current assets relates to property, plant and equip
nal sales are based on the location of the customer’s ment, intangible assets and leased products. Elimina
registered office. Revenues with major customers were tions disclosed for non-current assets relate to leased
not material overall. The information disclosed for non- products.
Information by region
External Non-current
revenues assets
in € million 2014 2013* 2014 2013*
Germany 12,992 11,797 27,137 25,320

USA 13,666 12,691 17,093 12,911
China 15,002 15,348 25 21
Rest of Europe 24,635 22,552 11,643 10,651
Rest of the Americas 2,961 3,103 2,050 1,668
Other 11,145 10,568 1,102 1,025
Eliminations – – – 5,204 – 4,335
Group 80,401 76,059 53,846 47,261
*
Munich, 19 February 2015
Bayerische Motoren Werke

Aktiengesellschaft
The Board of Management
Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer
Milagros Caiña Carreiro-Andree Dr.-Ing. Klaus Draeger
Dr. Friedrich Eichiner Klaus Fröhlich
Harald Krüger Dr. Ian Robertson (HonDSc)
Peter Schwarzenbauer
170
STATEMENT ON CORPORATE GOVERNANCE
Good corporate governance – acting in accordance with In accordance with the requirements of the German
the principles of responsible management aimed at in Co-determination Act for companies that generally em
creasing the value of the business on a sustainable basis – ploy more than 20,000 people, the Supervisory Board
is an essential requirement for the BMW Group em of BMW AG is required to comprise ten shareholder
bracing all areas of the business. Corporate culture within representatives elected at the Annual General Meeting
the BMW Group is founded on transparent reporting (Supervisory Board members representing equity or
and internal communication, a policy of corporate shareholders) and ten employees elected in accordance
governance aimed at the interests of stakeholders, fair with the provisions of the Co-determination Act (Super
and open dealings between the Board of Management visory Board members representing employees). The
and the Supervisory Board as well as among employees ten Supervisory Board members representing employees
and compliance with the law. The Board of Management comprise seven Company employees, including one
and Supervisory Board report in this statement on executive staff representative, and three members elected
important aspects of corporate governance pursuant to following nomination by unions.
§ 289 a HGB and section 3.10 of the German Corporate
Governance Code (GCGC). The close interaction between Board of Management
and Supervisory Board in the interests of the enterprise
Information on the Company’s Governing Constitution as described above is also known as a “two-tier board
The designation “BMW Group” comprises Bayerische structure”.
Motoren Werke Aktiengesellschaft (BMW AG) and its
group entities. BMW AG is a stock corporation (Aktien Declaration of Compliance and the BMW Group
gesellschaft) based on the German Stock Corporation Corporate Governance Code
Act (Aktiengesetz) and has its registered office in Management and supervisory boards of companies listed
Munich, Germany. It has three representative bodies: in Germany are required by law (§ 161 German Stock
the Annual General Meeting, the Supervisory Board Corporation Act) to report once a year whether the offi
and the Board of Management. The duties and authori cially published and relevant recommendations issued
ties of those bodies derive from the Stock Corporation by the “German Government Corporate Governance
Act and the Articles of Incorporation of BMW AG. Code Commission”, as valid at the date of the declara
Shareholders, as the owners of the business, exercise tion, have been, and are being, complied with. Com
their rights at the Annual General Meeting. The Annual panies affected are also required to state which of the
General Meeting decides in particular on the utilisation recommendations of the Code have not been or are not
of unappropriated profit, the ratification of the acts being applied, stating the reason or reasons. The full
of the members of the Board of Management and of the text of the declaration, together with explanatory com
Supervisory Board, the appointment of the external ments, is shown on the following page of this Annual
170 STATEMENT ON
CORPORATE GOVERNANCE auditor, changes to the Articles of Incorporation, speci Report.
(Part of Management Report)
170 Information on the Company’s
fied capital measures and elects the shareholders’
Governing Constitution representatives to the Supervisory Board. The Board of The Board of Management and the Supervisory Board
171 Declaration of the Board of
Management and of the
Management manages the enterprise under its own approved the Group’s own Corporate Governance Code
Supervisory Board pursuant to responsibility. Within this framework, it is monitored based on the GCGC in previous years in order to pro
§ 161 AktG
172 Members of the Board of
and advised by the Supervisory Board. The Supervisory vide interested parties with a comprehensive and stand-
Management Board appoints the members of the Board of Manage alone document covering the corporate governance
173 Members of the Supervisory
Board ment and can, at any time, revoke an appointment if practices applied by the BMW Group. A coordinator
176 Work Procedures of the there is an important reason. The Board of Manage responsible for all corporate governance issues reports
Board of M anagement
178 Work Procedures of the ment keeps the Supervisory Board informed of all sig directly and on a regular basis to the Board of Manage
Supervisory Board nificant matters regularly, promptly and comprehen ment and Supervisory Board.
183 Information on Corporate
Governance Practices sively, following the principles of conscientious and
faithful a ccountability and in accordance with prevailing The Corporate Governance Code for the BMW Group,
law and the reporting duties allocated to it by the Super together with the Declaration of Compliance, Articles
visory Board. The Board of Management requires of Incorporation and other information, can be viewed
the approval of the Supervisory Board for certain major and / or downloaded from the BMW Group’s website at
transactions. The Supervisory Board is not, however, www.bmwgroup.com/ir under the menu items “Corpo
authorised to undertake management measures itself. rate Facts” and “Corporate Governance”.
171 Statement on Corporate Governance
Declaration by the Board of Management and the

Supervisory Board of Bayerische Motoren Werke
Aktiengesellschaft with respect to the recommendations
of the “Government Commission on the German
Corporate Governance Code” pursuant to § 161 German
Stock Corporation Act
The Board of Management and Supervisory Board
of Bayerische Motoren Werke Aktiengesellschaft
(“BMW AG”) declare the following regarding the recom
mendations of the “Government Commission on the
German Corporate Governance Code”:
1. Since issuance of the last Declaration in December

2013, BMW AG has complied with all of the recommen
dations published officially on 10 June 2013 (Code
version dated 13 May 2013), to the extent that they were
already applicable.
2.
BMW AG will in future comply with all of the recom
mendations published on 30 September 2014 in the
electronic Federal Gazette (Code version dated 24 June
2014), with the following exception:
It is recommended in section 4.2.5 sentences 5 and 6

of the Code that specified information pertaining to
management board compensation be disclosed in the
Compensation Report. These recommendations will
not be complied with, due to uncertainties with respect
to their interpretation and doubts as to whether the
supplementary use of model tables would be instru
mental in making the BMW Group’s Compensation
Report transparent and generally understandable in ac
cordance with generally applicable financial reporting
requirements (see section 4.2.5 sentence 3 of the Code).
Munich, December 2014

Aktiengesellschaft
On behalf of the On behalf of the

Supervisory Board Board of Management
Prof. Dr.-Ing. Dr. h. c. Dr.-Ing. Dr.-Ing. E. h.
Dr.-Ing. E. h. Joachim Milberg Norbert Reithofer
Chairman Chairman
172
Members of the Board of Management
Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer (born 1956 ) Dr. Friedrich Eichiner (born 1955 )

Chairman Finance
Mandates Mandates
Siemens Aktiengesellschaft Allianz Deutschland AG
(since 27. 01. 2015) FESTO Aktiengesellschaft
Henkel AG & Co. KGaA (Shareholders’ Committee) BMW Brilliance Automotive Ltd. (Deputy Chairman)
FESTO Management Aktiengesellschaft

Milagros Caiña Carreiro-Andree (born 1962)
Human Resources, Industrial Relations Director Klaus Fröhlich (born 1960)
Development
(since 09. 12. 2014)
Dr.-Ing. Herbert Diess (born 1958 )
Development
(until 09. 12. 2014) Harald Krüger (born 1965 )
Production
Mandates
Dr.-Ing. Klaus Draeger (born 1956 ) BMW (South Africa) (Pty) Ltd. (Chairman)
Purchasing and Supplier Network BMW Motoren GmbH (Chairman)

Dr. Ian Robertson (HonDSc) (born 1958 )
Sales and Marketing BMW,
Sales Channels BMW Group
Mandates
Dyson James Group Limited

Peter Schwarzenbauer (born 1959)
MINI, Motorcycles, Rolls-Royce,
Aftersales BMW Group
Mandates
170 STATEMENT ON Rolls-Royce Motor Cars Limited (Chairman)
CORPORATE GOVERNANCE

Governing Constitution

Supervisory Board pursuant to
§ 161 AktG
Management
173 Members of the Supervisory General Counsel:
Board Dr. Jürgen Reul
176 Work Procedures of the
Supervisory Board
Governance Practices
Membership of other statutory supervisory boards.

Membership of equivalent national or foreign boards of business enterprises.
Members of the Supervisory Board
Prof. Dr.-Ing. Dr. h. c. Dr.-Ing. E. h. Stefan Schmid 1 (born 1965 )

Joachim Milberg (born 1943 ) Deputy Chairman
Chairman Chairman of the Works Council, Dingolfing
Former Chairman of the Board of
Management of BMW AG Member of the Presiding Board, Personnel Committee,
Audit Committee and Mediation Committee
Chairman of the Presiding Board, Personnel Committee
and Nomination Committee; member of Audit Committee
and the Mediation Committee Dr. jur. Karl-Ludwig Kley (born 1951)
Mandates Deputy Chairman
Bertelsmann Management SE (Deputy Chairman) Chairman of the Executive Management of
Bertelsmann SE & Co. KGaA (Deputy Chairman) Merck KGaA
FESTO Aktiengesellschaft (Deputy Chairman)
(until 25. 04. 2014) Chairman of the Audit Committee and Independent
Deere & Company Finance Expert; member of the Presiding Board,
FESTO Management Aktiengesellschaft (Deputy Chairman) Personnel Committee and Nomination Committee
(until 25. 04. 2014) Mandates
Bertelsmann Management SE
Bertelsmann SE & Co. KGaA
Manfred Schoch1 (born 1955 ) Deutsche Lufthansa Aktiengesellschaft
Deputy Chairman
Chairman of the European and
General Works Council Christiane Benner 2 (born 1968)
Industrial Engineer (since 15. 05. 2014)
Executive Member of the
Member of the Presiding Board, Personnel Committee, Executive Board of IG Metall
Audit Committee and Mediation Committee Mandates
Robert Bosch GmbH
T-Systems International GmbH (until 31. 07. 2014)
Stefan Quandt (born 1966 )
Deputy Chairman
Entrepreneur Bertin Eichler 2 (born 1952 )
(until 15. 05. 2014)
Member of the Presiding Board, Personnel Committee, ormer Executive Member of the
F
Audit Committee, Nomination Committee and Mediation Executive Board of IG Metall
Committee Mandates
Mandates C. + H. Winter GmbH (since 01. 05. 2014)
DELTON AG (Chairman) Luitpoldhütte AG
AQTON SE (Chairman) ThyssenKrupp AG (Deputy Chairman)
DataCard Corp. (until 11. 11. 2014) (until 17. 01. 2014)
Entrust Datacard Corp. (since 12. 11. 2014) BGAG Beteiligungsgesellschaft der
Gewerkschaften GmbH (Chairman Advisory Board)

1 Employeerepresentatives (company employees).

2 Employeerepresentatives (union representatives).

3 Employeerepresentatives (members of senior management).
174
Franz Haniel (born 1955 ) Prof. Dr. rer. pol. Renate Köcher (born 1952)
Engineer, MBA Director of Institut für Demoskopie Allensbach
Mandates Gesellschaft zum Studium der öffentlichen
DELTON AG (Deputy Chairman) Meinung mbH
Franz Haniel & Cie. GmbH (Chairman) Mandates
Heraeus Holding GmbH Allianz SE
Metro AG (Chairman) Infineon Technologies AG
secunet Security Networks AG (until 14. 05. 2014) Nestlé Deutschland AG
Giesecke & Devrient GmbH (until 08. 04. 2014) Robert Bosch GmbH
TBG Limited

Ulrich Kranz3 (born 1958)
Prof. Dr. rer. nat. Dr. h. c. Reinhard Hüttl (born 1957 ) (since 15. 05. 2014)
Chairman of the Executive Board of Head of Product Line BMW i
Helmholtz-Zentrum Potsdam Deutsches
GeoForschungsZentrum – GFZ
University Professor Dr. h. c. Robert W. Lane (born 1949)
Former Chairman and Chief Executive Officer of
Deere & Company
Prof. Dr. rer. nat. Dr.-Ing. E. h. Mandates
Henning Kagermann (born 1947) General Electric Company
President of acatech – Deutsche Akademie der Northern Trust Corporation
Technikwissenschaften e. V. Verizon Communications Inc.
Mandates
Deutsche Bank AG
Deutsche Post AG Horst Lischka2 (born 1963)
Franz Haniel & Cie GmbH General Representative of IG Metall Munich
Münchener Rückversicherungs-Gesellschaft Mandates
Aktiengesellschaft in München KraussMaffei Group GmbH
Nokia Corporation (until 17. 06. 2014) KraussMaffei Technologies GmbH
Wipro Limited (until 30. 06. 2014) MAN Truck & Bus AG

170 STATEMENT ON

CORPORATE GOVERNANCE Susanne Klatten (born 1962) Willibald Löw1 (born 1956)
170 Information on the Company’s Entrepreneur Chairman of the Works Council, Landshut

Management and of the Member of the Nomination Committee
§ 161 AktG
Mandates Wolfgang Mayrhuber (born 1947 )
172 Members of the Board of ALTANA AG (Deputy Chairman) Chairman of the Supervisory Board of
Management
SGL Carbon SE (Chairman) Deutsche Lufthansa Aktiengesellschaft
Board UnternehmerTUM GmbH (Chairman) Mandates
Board of M anagement Deutsche Lufthansa Aktiengesellschaft (Chairman)
178 Work Procedures of the Infineon Technologies AG (Chairman)
Supervisory Board
183 Information on Corporate Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München
189 Compensation Report HEICO Corporation

1 Employeerepresentatives (company employees).

2 Employeerepresentatives (union representatives).

3 Employeerepresentatives (members of senior management).
Dr. Dominique Mohabeer1 (born 1963 )

Member of the Works Council, Munich

Brigitte Rödig1 (born 1963)
Member of the Works Council, Dingolfing

Dr. Markus Schramm3 (born 1963)
(until 15. 05. 2014)
Head of Development Aftersales
Business Management and
Mobility Services BMW Group

Jürgen Wechsler 2 (born 1955 )
Regional Head of IG Metall Bavaria
Mandates
Schaeffler AG (Deputy Chairman)

Werner Zierer1 (born 1959)
Chairman of the Works Council, Regensburg
176
Composition and work procedures of the Board of also takes decisions at a basic policy level relating to
Management of BMW AG and its committees the Group’s automobile product strategies and product
The Board of Management governs the enterprise under projects inasmuch as these are relevant for all brands.
its own responsibility, acting in the interests of the BMW The Board of Management and its committees may, as
Group with the aim of achieving sustainable growth required and depending on the subject matters being
in value. The interests of shareholders, employees and discussed, invite non-voting advisers to participate at
other stakeholders are also taken into account in the meetings.
pursuit of this aim.
Terms of reference approved by the Board of Manage
The Board of Management determines the strategic ment contain a planned allocation of divisional respon
orientation of the enterprise, agrees upon it with the sibilities between the individual board members. These
Supervisory Board and ensures its implementation. terms of reference also incorporate the principle that
The Board of Management is responsible for ensuring the full Board of Management bears joint responsibility
that all provisions of law and internal regulations are for all matters of particular importance and scope. In
complied with. Further details about compliance within addition, members of the Board of Management man
the BMW Group can be found in the “Corporate age the relevant portfolio of duties under their responsi
Governance” section of the Annual Report. The Board bility, whereby case-by-case rules can be put in place
of Management is also responsible for ensuring that for cross-divisional projects. Board members continually
appropriate risk management and risk controlling sys provide the Chairman of the Board of Management
tems are in place throughout the Group. with all information regarding major transactions and
developments within their area of responsibility. The
During their period of employment for BMW AG, mem Chairman of the Board of Management coordinates
bers of the Board of Management are bound by a com cross-divisional matters with the overall targets and plans
prehensive non-competition clause. They are required of the BMW Group, involving other board members to
to act in the enterprise’s best interests and may not the extent that divisions within their area of responsi
pursue personal interests in their decisions or take ad bility are affected.
vantage of business opportunities intended for the
enterprise. They may only undertake ancillary activities, The Board of Management takes its decisions at meetings
in particular supervisory board mandates outside generally held on a weekly basis which are convened,
the BMW Group, with the approval of the Supervisory coordinated and headed by the Chairman of the Board
Board’s Personnel Committee. Each member of the of Management. At the request of the Chairman, de
Board of Management of BMW AG is obliged to disclose cisions can also be taken outside of board meetings if
conflicts of interest to the Supervisory Board without none of the board members object to this procedure. A
170 STATEMENT ON
CORPORATE GOVERNANCE delay and inform the other members of the Board of meeting is quorate if all Board of Management members
Management accordingly. are invited to the meeting in good time. Members unable
Governing Constitution to attend any meeting are entitled to vote in writing,
Following the appointment of a new member to the by fax or by telephone. Votes cast by phone must be sub
Supervisory Board pursuant to Board of Management, the BMW Corporate Governance sequently confirmed in writing. Except in urgent cases,
§ 161 AktG
Officer informs the new member of the framework matters relating to a division for which the responsible
Management conditions under which the board member’s duties are board member is not present will only be discussed and
Board to be carried out – in particular those enshrined in the decided upon with that member’s consent.
176 Work Procedures of the BMW Group’s Corporate Governance Code – as well
178 Work Procedures of the as the duty to cooperate when a transaction or event Unless stipulated otherwise by law or in BMW AG’s
Supervisory Board triggers reporting requirements or requires the approval statutes, the Board of Management makes decisions on
Governance Practices of the Supervisory Board. the basis of a simple majority of votes cast at meetings.
Outside of board meetings, decisions are taken on
The Board of Management consults and takes decisions the basis of a simple majority of board members. In the
as a collegiate body in meetings of the Board of Manage event of a tied vote, the Chairman of the Board of
ment, the Sustainability Board, the Operations Com Management has the casting vote. Any changes to the
mittee and the Committee for Executive Management board’s terms of reference must be passed unanimously.
Matters. At its meetings, the Board of Management A board meeting may only be held if more than half of
defines the overall framework for business strategies the board members are present.
and the use of resources, takes decisions regarding the
implementation of strategies and deals with issues of In the event that the Chairman of the Board of Manage
particular importance to the BMW Group. The full board ment is not present or is unable to attend a meeting, the
Member of the Board responsible for Finance will management positions). This committee has, on the
represent him. one hand, an advisory and preparatory role (e. g.
making suggestions for promotions to the two remu
Minutes are taken of all meetings and the Board of neration groups below board level and preparing
Management’s resolutions and signed by the Chairman. decisions to be taken at board meetings with regard
Decisions taken by the Board of Management are to human resources principles with the emphasis on
binding for all employees. executive management issues) and a decision-taking
function on the other (e. g. deciding on appointments
The rules relating to meetings and resolutions taken to senior management positions and promotions to
by the full Board of Management are also applicable for higher remuneration groups or the wording of human
its committees. resources principles decided on by the full board).
The Committee has two members who are entitled to
Members of the Board of Management not represented vote at meetings, namely the Chairman of the Board
in a committee are provided with the agendas and of Management (who also chairs the meetings) and
minutes of committee meetings. Committee matters are the board member responsible for Human Resources
dealt with in full board meetings if the committee con and Social Affairs. The Head of Human Resources,
siders it necessary or at the request of a member of the Personnel Network and Human Resources Interna
Board of Management. tional and the Head of Human Resources Executive
Management also participate in an advisory function.
A secretariat for Board of Management matters has been At the request of the Chairman, resolutions may also
established to assist the Chairman and other board be passed outside of committee meetings by casting
members with the preparation and follow-up work con votes in writing, by fax or by telephone if the other
nected with board meetings. member entitled to vote does not object immediately.
As a general rule, between five and ten meetings are
At meetings of the Operations Committee (generally held held each year.
three times a month), decisions are reached in connec
tion with automobile product projects, based on the The Board of Management is represented by its Chair
strategic orientation and decision framework stipulated man in its dealings with the Supervisory Board. The
at Board of Management meetings. The Operations Chairman of the Board of Management maintains
Committee comprises the Board of Management mem regular contact with the Chairman of the Supervisory
ber responsible for Development (who also chairs the Board and keeps him informed of all important mat
meetings), together with the board members responsible ters. The Supervisory Board has passed a resolution
for the following areas: Purchasing and Supplier Network; specifying the information and reporting duties of the
Production; Sales and Marketing BMW, Sales Channels Board of Management. As a general rule, in the case
BMW Group; and MINI , Motorcycles, Rolls-Royce, of reports required by dint of law, the Board of Manage
A
ftersales BMW Group. If the committee chairman is ment submits its reports to the Supervisory Board in
not present or unable to attend a meeting, the Member writing. To the extent possible, documents required as
of the Board responsible for Production represents a basis for taking decisions are sent to the members of
him. Resolutions taken at meetings of the Operations the Supervisory Board in good time before the relevant
Committee are made online. meeting. Regarding transactions of fundamental im
portance, the Supervisory Board has stipulated specific
The full board usually convenes twice a year in its func transactions which require the approval of the Super
tion as Sustainability Board in order to define strategy visory Board. Whenever necessary, the Chairman of
with regard to sustainability and decide upon measures the Board of Management obtains the approval of the
to implement that strategy. The Head of Corporate Supervisory Board and ensures that reporting duties
Affairs and the Representative for Sustainability and to the Supervisory Board are complied with. In order
Environmental Protection participate in these meetings to fulfil these tasks, the Chairman is supported by all
in an advisory capacity. members of the Board of Management. The fundamen
tal principle followed when reporting to the Supervi
The Board’s Committee for Executive Management sory Board is that the latter should be kept informed
Matters deals with enterprise-wide issues affecting ex regularly, without delay and comprehensively of all
ecutive managers of the BMW Group, either in their significant matters relating to planning, business per
entirety or individually (such as the executive manage formance, risk exposures, risk management and com
ment structure, potential candidates for executive pliance, as well as any major variances between actual
management, nominations for or promotions to senior and budgeted figures.
178
Composition and work procedures of the Supervisory representatives and employee representatives prepare the
Board of BMW AG and its committees Supervisory Board meetings separately and, if necessary,
BMW AG’s Supervisory Board, comprising ten share together with members of the Board of Management.
holder representatives (elected by the Annual General Members of the Supervisory Board are in particular le
Meeting) and ten employee representatives (elected gally bound to maintain confidentiality with respect to
by employees in accordance with the German Co-deter any confidential reports they receive and any confiden
mination Act), has the task of advising and supervising tial discussions in which they partake.
the Board of Management in its governance of the
BMW Group. It is involved in all decisions of fundamen The Chairman of the Supervisory Board coordinates
tal importance for the BMW Group. The Supervisory work within the Supervisory Board, chairs its meet
Board appoints the members of the Board of Manage ings, handles the external affairs of the Supervisory
ment and decides upon the level of compensation Board and represents it in its dealings with the Board
they are to receive. The Supervisory Board can revoke of Management.
appointments for important reasons.
The Supervisory Board is quorate if all members have
Together with the Personnel Committee and the Board been invited to the meeting and at least half of its
of Management, the Supervisory Board ensures that members participate in the vote on a particular resolu
long-term successor planning is in place. In their assess tion. A resolution relating to an agenda item not in
ment of candidates for a post on the Board of Manage cluded in the invitation is only valid if none of the mem
ment, the underlying criteria applied by the Supervisory bers of the Supervisory Board who were not present
Board for determining the suitability of candidates are at the meeting object to the resolution and a minimum
their expertise in the relevant area of board responsi of two-thirds of the members are present.
bility, outstanding leadership qualities, a proven track
record and an understanding of the BMW Group’s busi As a basic rule, resolutions are passed by the Super
ness. The Supervisory Board takes diversity into ac visory Board by simple majority. The German Co-de
count when assessing, on balance, which individual will termination Act contains specific requirements with
best complement the Board of Management as a repre regard to majority voting and technical procedures,
sentative body of the Company. “Diversity” in the con particularly with regard to the appointment and revoca
text of the decision process is understood by the Super tion of appointment of management board members
visory Board to encompass different, complementary and the election of a supervisory board chairman or
individual profiles, work and life experiences, at both a deputy chairman. In the event of a tied vote in the
national and international level, as well as appropriate Supervisory Board, the Chairman of the Supervisory
representation of both genders. The Supervisory Board Board has two votes in a renewed vote, if it also results
170 STATEMENT ON
CORPORATE GOVERNANCE strives to ensure appropriate female representation in a tie.
on the Board of Management. The Board of Manage
Governing Constitution ment reports accordingly to the Personnel Committee In practice, resolutions are taken by the Supervisory
and the Supervisory Board at regular intervals on the Board and its committees at the relevant meetings. A
Supervisory Board pursuant to proportion of, and changes in, management positions Supervisory Board member who is not present at a
§ 161 AktG
held by women, in particular below senior executive meeting can have his / her vote cast by another Super
Management level and at uppermost management level. When actu visory Board member if an appropriate request has
Board ally selecting an individual for a post on the Board of been made in writing, by fax or in electronic form. This
176 Work Procedures of the Management, the Supervisory Board decides in the rule also applies to the casting of the second vote by
178 Work Procedures of the best interests of the Company and after taking account the Chairman of the Supervisory Board. The Chairman
Supervisory Board of all relevant circumstances. of the Supervisory Board can also accept the retrospec
Governance Practices tive casting of votes by any members not present at a
The Supervisory Board holds a minimum of two meet meeting if this is done within the time limit previously
ings in each of the first and second six-month periods of set. In special cases, resolutions may also be taken
the calendar year. Normally, five plenary meetings are outside of meetings, i. e. in writing, by fax or by elec
held per calendar year. One meeting each year is planned tronic means. Minutes are taken of all resolutions and
to cover a number of days and is used, amongst other meetings.
things, to enable an in-depth exchange on strategic and
technological matters. The main emphases of meetings in After its meetings, the Supervisory Board is generally
the period under report are described in the Report of provided information on new vehicle models in the
the Supervisory Board. As a general rule, the shareholder form of a short presentation.
Following the election of a new Supervisory Board mem measures such as that may be necessary to carry out
ber, the BMW Corporate Governance Officer informs the tasks assigned to them. The Company provides
the new member of the principal issues affecting his or appropriate assistance to members of the Supervisory
her duties – in particular those enshrined in the BMW Board in this respect.
Group Corporate Governance Code – including the
duty to cooperate when a transaction or event triggers The ability of the Supervisory Board to supervise and
reporting requirements or is subject to the approval of advise the Board of Management independently is also
the Supervisory Board. assisted by the fact that the Supervisory Board is required,
based on its own assessment, to have an appropriate
All members of the Supervisory Board of BMW AG are number of independent members. Prof. Dr.-Ing. Dr. h. c.
required to ensure that they have sufficient time to Dr.-Ing. E. h. Joachim Milberg is the only person on the
perform their mandate. If members of the Supervisory Supervisory Board to have previously served on the
Board of BMW AG are also members of the management Board of Management, of which he ceased to be a mem
board of a listed company, they may not accept more ber in 2002. Supervisory Board members do not exercise
than a total of three mandates on non-BMW Group super directorships or similar positions or undertake advisory
visory boards of listed companies or in other bodies tasks for important competitors of the BMW Group.
with comparable requirements.
Taking into account the specific circumstances of the
The Supervisory Board examines the efficiency of its BMW Group and the number of board members, the
activities on a regular basis. Joint discussions are also Supervisory Board has set up a Presiding Board and
held at plenum meetings, prepared on the basis of a four committees, namely the Personnel Committee, the
questionnaire previously devised by and distributed to Audit Committee, the Nomination Committee and
the members of the Supervisory Board. The Chairman the Mediation Committee (see “Overview of Supervisory
of the Supervisory Board is open to suggestions for Board Committees, Meetings”). Such committees serve
improvement at all times. to raise the efficiency of the Supervisory Board’s work
and facilitate the handling of complex issues. The estab
Each member of the Supervisory Board of BMW AG is lishment and function of a mediation committee is pre
bound to act in the enterprise’s best interests. Members scribed by law. The person chairing a committee reports
of the Supervisory Board may not pursue personal in in detail on its work at each plenum meeting.
terests in their decisions or take advantage of business
opportunities intended for the benefit of the enterprise. The composition of the Presiding Board and the various
committees is based on legal requirements, BMW AG’s
Members of the Supervisory Board are obliged to in Articles of Incorporation, terms of reference and corpo
form the full Supervisory Board of any conflicts of inter rate governance principles. The expertise and technical
est which may result from a consultant or directorship skills of its members are also taken into account.
function with clients, suppliers, lenders or other busi
ness partners, enabling the Supervisory Board to report According to the relevant terms of reference, the Chair
to the shareholders at the Annual General Meeting on man of the Supervisory Board is, in this capacity, auto
how it has dealt with such issues. Material conflicts of matically a member of the Presiding Board, the Personnel
interest and those which are not merely temporary in Committee and the Nomination Committee, and also
nature result in the termination of the mandate of the chairs these committees.
relevant Supervisory Board member.
The number of meetings held by the Presiding Board
With regard to nominations for the election of members and the committees depends on current requirements.
of the Supervisory Board, care is taken that the Super The Presiding Board, the Personnel Committee and
visory Board in its entirety has the required knowledge, the Audit Committee normally hold several meetings in
skills and expert experience to perform its tasks in a the course of the year (see “Overview of Supervisory
proper manner. Board Committees, Meetings” for details of the number
of meetings held in 2014).
The Supervisory Board has set out specific targets for its
own composition (see section “Composition targets for In line with the terms of reference for the activities of
the Supervisory Board”). the plenum, the Supervisory Board has also set terms of
reference for the Presiding Board and the various com
The members of the Supervisory Board are responsible mittees. The committees are only quorate if all members
for undertaking appropriate basic and further training are present. Resolutions taken by the committees are
180
passed by simple majority unless stipulated otherwise each case taking account of the consequences of related
by law. Minutes are also taken at the meetings and for parties), as well as other activities of members of the Board
the resolutions of the committees and the Presiding of Management, including the acceptance of non-BMW
Board, and signed by the person chairing the particular Group supervisory board mandates.
meeting. This person also represents the committee in
any dealings it may have with the Board of Management The Audit Committee deals in particular with issues
or third parties. relating to the supervision of the financial reporting
process, the effectiveness of the internal control system,
Members of the Supervisory Board may not delegate their the risk management system, internal audit arrange
duties. The Supervisory Board, the Presiding Board ments and compliance. It also monitors the external
and committees may call on experts and other suitably audit, auditor independence and any additional work
informed persons to attend meetings to give advice on performed by the external auditor. It prepares the pro
specific matters. posal for the election of the external auditor at the An
nual General Meeting, makes a recommendation re
The Supervisory Board, the Presiding Board and the garding the election of the external auditor, issues the
committees also meet without the Board of Management audit engagement letter and agrees on points of audit
if necessary. focus as well as the auditor’s fee. The Audit Committee
prepares the Supervisory Board’s resolution relating
BMW AG ensures that the Supervisory Board and its to the Company and Group Financial Statements and
committees are sufficiently equipped to carry out their discusses interim reports with the Board of Manage
duties. This includes the services provided by a cen ment before publication. The Audit Committee also
tralised secretariat to support the chairmen in coordi decides on the Supervisory Board’s agreement to use
nating the work of the Supervisory Board. the Authorised Capital 2014 (Article 4 no. 5 of the
Articles of Incorporation) and on amendments to the
In accordance with the relevant terms of reference, the Articles of Incorporation which only affect its wording.
Presiding Board comprises the Chairman of the Super
visory Board and board deputies. The Presiding Board In line with the recommendations of the German Cor
prepares Supervisory Board meetings to the extent that porate Governance Code, the Chairman of the Audit
the subject matter to be discussed does not fall within Committee is independent and not a former Chairman
the remit of a committee. This includes, for example, of the Board of Management and has specific know-how
preparing the annual Declaration of Compliance with and experience in applying financial reporting stand
the German Corporate Governance Code and the Super ards and internal control procedures. He also fulfils the
visory Board’s efficiency examination. requirements of being an independent financial expert
170 STATEMENT ON
CORPORATE GOVERNANCE as defined by § 100 (5) and § 107 (4) AktG.
The Personnel Committee prepares the decisions of the
Governing Constitution Supervisory Board with regard to the appointment and The Nomination Committee is charged with the task
revocation of appointment of members of the Board of finding suitable candidates for election to the Super
Supervisory Board pursuant to of Management and, together with the full Supervisory visory Board (as shareholder representatives) and for
§ 161 AktG
Board and the Board of Management, ensures that long- inclusion in the Supervisory Board’s proposals for elec
Management term successor planning is in place. The Personnel tion at the Annual General Meeting. In line with the
Board Committee also prepares the decisions of the Super recommendations of the German Corporate Governance
176 Work Procedures of the visory Board with regard to the Board of Management’s Code, the Nomination Committee comprises only share
178 Work Procedures of the compensation and the Supervisory Board’s regular holder representatives.
Supervisory Board review of the Board of Management’s compensation
Governance Practices system. In conjunction with the resolutions taken by The establishment and composition of a mediation
the Supervisory Board regarding the compensation of committee are required by the German Co-determina
the Board of Management, the Personnel Committee tion Act. The Mediation Committee has the task of
is responsible for drawing up, amending and revoking making proposals to the Supervisory Board if a resolu
service / employment contracts or, when necessary, tion for the appointment of a member of the Board of
other relevant contracts with members of the Board of Management has not been carried by the necessary
Management. In specified cases, the Personnel Com two-thirds majority of members’ votes. In accordance
mittee also has the authority to give the necessary ap with statutory requirements, the Mediation Commit
proval for a particular transaction (instead of the Super tee comprises the Chairman and the Deputy Chairman
visory Board). This includes loans to members of the of the Supervisory Board and one member each se
Board of Management or Supervisory Board, specified lected by shareholder representatives and employee
contracts with members of the Supervisory Board (in representatives.
Overview of Supervisory Board Committees, Meetings
Principal duties, Members Number Average

basis for activities of meetings attendance
2014
Presiding Board
– preparation of Supervisory Board meetings to the extent that the subject Joachim Milberg1 4 95 %
matter to be discussed does not fall within the remit of a committee Manfred Schoch
– activities based on terms of reference Stefan Quandt
Stefan Schmid
Karl-Ludwig Kley
Personnel Committee
Joachim Milberg1
– preparation of decisions relating to the appointment and revocation of appoint- 6 97 %
ment of members of the Board of Management, the compensation and the Manfred Schoch
regular review of the Board of Management’s compensation system Stefan Quandt
– conclusion, amendment and revocation of employment contracts (in conjunc- Stefan Schmid
tion with the resolutions taken by the Supervisory Board regarding the com- Karl-Ludwig Kley
pensation of the Board of Management) and other contracts with members of
the Board of Management
– decisions relating to the approval of ancillary activities of Board of Management
members, including acceptance of non-BMW Group supervisory mandates as
well as the approval of transactions requiring Supervisory Board approval by dint
of law (e. g. loans to Board of Management or Supervisory Board members)
– set up in accordance with the recommendation contained in the German
Corporate Governance Code, activities based on terms of reference
Audit Committee
– supervision of the financial reporting process, effectiveness of the internal Karl-Ludwig Kley 1, 2 4 94 %
control system, risk management system, internal audit arrangements and Joachim Milberg plus
compliance Manfred Schoch 3 telephone
– supervision of external audit, in particular auditor independence and addi- Stefan Quandt conferences
tional work performed by external auditor Stefan Schmid
– preparation of proposals for election of external auditor at Annual General Meet-
ing, engagement of external auditor and compliance of audit engagement, de-
termination of areas of audit emphasis and fee agreements with external auditor
– preparation of Supervisory Board’s resolution on Company and Group Finan-
cial Statements
– discussion of interim reports with Board of Management prior to publication
– decision on approval for utilisation of Authorised Capital 2014
– amendments to Articles of Incorporation only affecting wording
– establishment in accordance with the recommendation contained in the
German Corporate Governance Code, activities based on terms of reference
Nomination Committee
– identification of suitable candidates (male / female) as shareholder representa- Joachim Milberg1 2 88 %
tives on the Supervisory Board to be put forward for inclusion in the Super Susanne Klatten
visory Board’s proposals for election at the Annual General Meeting Karl-Ludwig Kley
– establishment in accordance with the recommendation contained in the Stefan Quandt
German Corporate Governance Code, activities based on terms of reference
(In line with the recommendations of the
German Corporate Governance Code,
the Nomination Committee comprises
only shareholder representatives.)
Mediation Committee
– proposal to Supervisory Board if resolution for appointment of Board of Joachim Milberg – –
Management member has not been carried by the necessary two-thirds Manfred Schoch
majority of Supervisory Board members’ votes Stefan Quandt
– committee required by law Stefan Schmid
(In accordance with statutory require

ments, the Mediation Committee
comprises the Chairman and Deputy
Chairman of the Supervisory Board and
one member each selected by share-
holder representatives and employee
representatives.)
1
Chair.
2
Independent financial expert within the meaning of § 100 (5) AktG and § 107 (4) AktG.
182
Composition objectives of the Supervisory Board The Supervisory Board believes it is the joint respon
The Supervisory Board must be composed in such a way sibility of all persons and groupings participating in
that its members as a group possess the knowledge, skills the nomination and election process to ensure that
and experience required to properly complete its tasks. the Supervisory Board includes an appropriate num
To this end, the Supervisory Board has formally speci ber of qualified women.
fied the following concrete objectives regarding its com – At least twelve of the 20 members of the Supervisory
position, taking into account the recommendations Board should be independent members within the
contained in the German Corporate Governance Code: meaning of section 5.4.2 of the German Corporate
– If possible four of the members of the Supervisory Governance Code, including at least six members
Board should have international experience or spe representing the Company’s shareholders. Two inde
cialist knowledge with regard to one or more of pendent members of the Supervisory Board should
the non-German markets important to the Company. have expert knowledge of accounting or auditing.
– If possible, the Supervisory Board should include seven – No persons carrying out directorship functions or ad
members who have acquired in-depth knowledge and visory tasks for important competitors of the BMW
experience from within the enterprise. The Super Group may belong to the Supervisory Board. In com
visory Board should not, however, include more than pliance with prevailing legislation, the members of
two former members of the Board of Management. the Supervisory Board will strive to ensure that no
– If possible three of the shareholder representatives in persons will be nominated for election with whom a
the Supervisory Board should be entrepreneurs or serious conflict of interests could arise (other than
persons who have already gained experience in the temporarily) due to other activities and functions car
management or supervision of another medium or ried out by them outside the BMW Group; this in
large-sized company. cludes in particular advisory activities or directorships
– Ideally, three members of the Supervisory Board with customers, suppliers, creditors or other business
should be figures from the worlds of business, science partners.
or research who have gained experience in areas rele – As a general rule, the age limit for membership of the
vant to the BMW Group – e. g. chemistry, energy sup Supervisory Board should be set at 70 years. In ex
ply, information technology, or who have acquired ceptional cases, members may be allowed to remain
specialist knowledge in subjects relevant for the future on the Board up until the end of the Annual General
of the BMW Group e. g. customer requirements, mo Meeting following their 73rd birthday, in order to ful
bility, resources or sustainability. fil legal requirements or to facilitate smooth succes
– When seeking suitably qualified individuals for the sion in the case of persons with key roles or specialist
Supervisory Board whose specialist skills and leader qualifications.
ship qualities are most likely to strengthen the Board
170 STATEMENT ON
CORPORATE GOVERNANCE as a whole, consideration should also be given to di The time schedule set by the Supervisory Board for
versity. When preparing nominations, the extent to achieving the above-mentioned composition targets is
Governing Constitution which the work of the Supervisory Board would bene the Annual General Meeting in 2016. Future pro
fit from diversified professional and personal back posals for nomination made by the Supervisory Board
Supervisory Board pursuant to grounds (including international aspects) and from at the Annual General Meeting – insofar as they apply
§ 161 AktG
an appropriate representation of both genders should to shareholder Supervisory Board members – should
Management also be taken into account. In view of the proportion take account of these objectives in such a way that they
Board of women in the workforce (BMW AG: 14.8 %; BMW can be achieved with the support of the appropriate
176 Work Procedures of the Group 17.8 %) and in management positions (BMW AG: resolutions at the Annual General Meeting. The Annual
178 Work Procedures of the 11.4 %; BMW Group: 14.2 %) at 31 December 2014, General Meeting is not bound by nominations for elec
Supervisory Board the Supervisory Board is of the opinion that a propor tion proposed by the Supervisory Board. The freedom
Governance Practices tion of three female members out of a total of 20 mem of employees to vote for the employee members of the
bers (15 %) is satisfactory as far as gender mix is con Supervisory Board is also protected. Under the proce
cerned, but that an increase to at least four female dural rules stipulated by the German Co-Determination
members (20 %) would be desirable. The Supervisory Act, the Supervisory Board does not have the right to
Board therefore considers it appropriate that oppor nominate employee representatives for election. The ob
tunities available in conjunction with selection proce jectives which the Supervisory Board has set itself with
dures through to the end of the ordinary Annual regard to its composition are therefore not intended to
General Meeting in 2016 should be used to maintain be instructions to those entitled to vote or restrictions
the current proportion of 25 % female representation. on their freedom to vote. More to the point, they reflect
the composition which the current Supervisory Board Adaptability

believes should be striven for in future by those entitled In order to ensure our long-term success we must adapt
to nominate and elect board members, in view of the to new challenges with speed and flexibility. We there
advisory and supervisory needs of BMW AG’s Supervisory fore see change as an opportunity – adaptability is essen
Board. tial to be able to capitalise on it.
In the Supervisory Board’s opinion, its composition as Frankness

at 31 December 2014 fulfilled the composition objec As we strive to find the best solution, it is each em
tives detailed above. ployee’s duty to express any opposing opinions they
may have. The solutions we agree upon will then be
In order to provide shareholders with a profile of the consistently implemented by all those involved.
individual members of the Supervisory Board and
to make it easier to assess composition targets, brief Respect, trust, fairness
curricula vitae of the current members of the Super We treat each other with respect. Leadership is based on
visory Board are available on the Company’s website mutual trust. Trust is rooted in fairness and reliability.
at www.bmwgroup.com.
Employees
Information on corporate governance practices People make companies. Our employees are the strong
applied beyond mandatory requirements est factor in our success, which means our personnel
Core principles decisions will be among the most important we ever
Within the BMW Group, the Board of Management, the make.
Supervisory Board and the employees base their actions
on twelve core principles which are the cornerstone of Leading by example
the success of the BMW Group: Every manager must lead by example.
Customer focus Sustainability

The success of our Company is determined by our cus In our view, sustainability constitutes a lasting contribu
tomers. They are at the heart of everything we do. tion to the success of the Company. This is the b asis upon
The results of all our activities must be valued in terms which we assume ecological and social responsibility.
of the benefits they will generate for our customers.
Society
Peak performance Social responsibility is an integral part of our corporate
We aim to be the best – a challenge to which all of us self-image.
must rise. Each and every employee must be prepared
to deliver peak performance. We strive to be among Independence
the elite, but without being arrogant. It is the Company We secure the corporate independence of the BMW
and its products that count – and nothing else. Group through sustained profitable growth.
Responsibility The core principles are also available at www.bmwgroup.

Every BMW Group employee has the personal responsi com under the menu items “Responsibility” and “Em
bility for the Company’s success. When working in a ployees”.
team, each employee must assume personal responsibility
for his or her actions. We are fully aware that we are Social responsibility towards employees and along
working to achieve the Company’s goals. For this reason, the supplier chain
we work together in the best interests of the Company. The BMW Group stands by its social responsibilities. Our
corporate culture combines the drive for success with a
Effectiveness willingness to be open, trustworthy and transparent.
The only results that count for the Company are those We are well aware of our responsibility towards society.
which have a sustainable impact. In assessing leader Our models for sustainable social responsibility towards
ship, we must consider the effectiveness of performance employees and for ensuring compliance with interna
on results. tional social standards are based on various internationally
184
recognised guidelines. The BMW Group is committed to BMW Group not only makes high demands of itself but
adhering to the OECD’s guidelines for multinational also expects its suppliers and partners to meet the eco
companies and the contents of the ICC Business Charter logical and social standards it sets and strives continu
for Sustainable Development. Details of the contents ally to improve the efficiency of processes, measures
of these guidelines and other relevant information can and activities. For instance, we are successively requir
be found at www.oecd.org and www.iccwbo.org. The ing our dealers and importers to comply with ecolog
Board of Management signed the United Nations Global ical and social standards on a contractual basis. Simi
Compact in 2001 and, in 2005, together with employee larly, corresponding criteria are embedded in our
representatives, issued a “Joint Declaration on Human purchasing terms and our evaluation of suppliers with
Rights and Working Conditions in the BMW Group”. a view to ensuring the inclusion of sustainability as
This Joint Declaration was reconfirmed in 2010. With pects throughout the purchasing system. The BMW
the signature of these documents, we have given our Group Sustainability Standard is an integral compo
commitment to abide worldwide by internationally rec nent of our enquiry documents and of the automotive
ognised human rights and with the fundamental work supplier self-assessment questionnaire on sustainabil
ing standards of the International Labour Organization ity required to be completed sector-wide by new sup
(ILO). The most important of these are freedom of em pliers. The BMW Group expects suppliers to ensure
ployment, the prohibition of discrimination, the freedom that the BMW Group’s sustainability criteria are also
of association and the right to collective bargaining, adhered to by sub-suppliers. Purchasing terms and
the prohibition of child labour, the right to appropriate conditions and other information relating to purchasing
remuneration, regulated working times and compliance can be found in the publicly available section of the
with work and safety regulations. The complete text of BMW Group Partner Portal at https: / / b2b.bmw.com.
the UN Global Compact and the recommendations of
the ILO and other relevant information can be found at We also work in close partnership with our suppliers
www.unglobalcompact.org and www.ilo.org. The Joint and promote their commitment to sustainability.
Declaration on Human Rights and Working Conditions
in the BMW Group can be found at www.bmwgroup. Compliance in the BMW Group
com under the menu item “Responsibility” (Services / Responsible and lawful conduct is fundamental to the
downloads / topics: “Employees and Society”). success of the BMW Group. It is an integral part of
our corporate culture and the reason why customers,
It goes without saying that the BMW Group abides by shareholders, business partners and the general public
these fundamental principles and rights worldwide. place their trust in us. The Board of Management and
Employees have therefore been sensitised to this issue the employees of the BMW Group are obliged to act
since 2005 by means of regular internal communica responsibly and in compliance with applicable laws and
170 STATEMENT ON
CORPORATE GOVERNANCE tions and further training on recent developments in regulations.
this area. Two dedicated helplines – the “Human Rights
Governing Constitution Contact” and the BMW Group SpeakUP Line – are This principle has been embedded in BMW’s internal
available to employees wishing to raise queries or com rules of conduct for many years. In order to protect
Supervisory Board pursuant to plaints relating to human rights issues. The UN Guiding itself systematically against compliance-related and
§ 161 AktG
Principles for Business and Human Rights provide a reputational risks, the Board of Management created
Management framework for critical reflection and continuous improve a Compliance Committee several years ago, mandated
Board ment in our endeavours to ensure that human rights are to establish a worldwide Compliance Management
176 Work Procedures of the respected throughout the organisation. System throughout the BMW Group.
Supervisory Board Further information on social responsibility to employees The BMW Group Compliance Committee comprises
Governance Practices can be found in the section “Workforce”. the heads of the following divisions: Legal Affairs and
Patents, Corporate and Governmental Affairs, Corpo
Activities can only be sustainable, however, if they en rate Audit, Group Reporting, Organisational Develop
compass the entire value-added chain. That is why the ment and Corporate Human Resources. It manages and
monitors activities necessary to avoid non-compliance pliance Committee Office comprises ten employees and
with the law (Legal Compliance). These activities include is allocated in organisational terms to the Chairman of
training, information and communication measures, the Board of Management.
compliance controls and following up cases of non-com
pliance. The Chairman of the BMW Group Compliance Com
mittee keeps the Audit Committee (which is part of the
The BMW Group Compliance Committee reports regu Supervisory Board) informed on the current status of
larly to the Board of Management on all compliance- compliance activities within the BMW Group, both on a
related issues, including the progress made in refining regular and a case-by-case basis as the need arises.
the BMW Group Compliance Management System, de
tails of investigations performed, known infringements The Board of Management keeps track of and analyses
of the law, sanctions imposed and corrective / preventa compliance-related developments and trends on the
tive measures implemented. This ensures that the Board basis of the Group’s compliance reporting and input
of Management is immediately notified of any cases of from the BMW Group Compliance Committee. Measures
particular significance. The decisions taken by the BMW to improve the Compliance Management System are
Group Compliance Committee are drafted in concept, initiated on the basis of identified requirements.
and implemented operationally, by the BMW Group
Compliance Committee Office. The BMW Group Com A coordinated set of instruments and measures is em
ployed to ensure that the BMW Group, its representative
bodies, its managers and staff act in a lawful manner.
BMW Group Compliance Management System Particular emphasis is placed on compliance with anti
trust legislation and the avoidance of corruption risks.
Supervisory Board BMW AG
Annual
Compliance measures are supplemented by a whole
Report range of internal policies, guidelines and instructions,
Board of Management BMW AG which in part reflect applicable legislation. The BMW
Annual
Report Group Policy “Corruption Prevention” and the BMW
BMW Group Compliance Committee Group Instruction “Corporate Hospitality and Gifts”,
which were revised in 2014, deserve particular mention.
BMW Group Compliance Committee Office These documents deal with lawful handling of gifts
Annual
Compliance
and benefits and define appropriate assessment criteria
Compliance Operations Network Reporting and approval procedures for specified actions.
of all BMW Group
Compliance Responsibles
Compliance measures are determined and prioritised
on the basis of a group-wide compliance risk assess
ment covering all 331 business units and functions
Compliance Risk Legal Compliance worldwide within the BMW Group. The assessment of
Analysis Code and Regulations
compliance risks is updated annually. Measures are
realised with the aid of a regionally structured com
pliance management team covering all parts of the
Compliance Compliance
Investigations Communication BMW Group, which oversees a network of more than
and Controls Compliance 180 Compliance Responsibles.
Instruments and
Measures of
the BMW Group The various elements of the BMW Group Compliance
Compliance Compliance
Reporting Training Management System are shown in the diagram on the
left and are applicable for all BMW Group entities world
wide. To the extent that additional compliance require
Compliance Compliance ments apply to individual countries or specific lines
Contact and Governance and
SpeakUP Line Processes of business, these are covered by supplementary com
pliance measures.
186
The BMW Group Legal Compliance Code is the corner total of 3,900 employees have already completed this
stone of the Group’s Compliance Management System, training. The relevant divisions also implemented further
spelling out the Board of Management’s commitment measures and processes to make employees who par
to compliance as a joint responsibility (“tone from the ticipate in meetings with competitors sufficiently aware
top”). This document, which was revised and expanded of antitrust risks.
in 2014, explains the significance of legal compliance
and provides an overview of the various areas relevant Additional compliance coaching has also been imple
for the BMW Group. It is available both as a printed mented for international sales and financial service lo
brochure and for download in German and English. In cations in local markets. These multi-day classroom
addition, translations into eleven other languages are seminars strengthen the understanding of compliance
available in the BMW Group intranet. in selected units and enhance cooperation between
the central BMW Group Compliance Committee Office
Managers in particular bear a high degree of responsi and decentralised compliance offices. In 2014, market
bility and must set a good example with regard to pre coaching was conducted in Canada, China and the UK.
venting infringements. Managers throughout the BMW
Group acknowledge this principle by signing a written In order to avoid legal risks, all members of staff are
declaration, in which they also undertake to inform expected to discuss compliance matters with their
staff working for them of the content and significance managers and with the relevant departments within
of the Legal Compliance Code and make them aware the BMW Group, in particular Legal Affairs, Corporate
of legal risks. Managers must, at regular intervals and Audit and Corporate Security. The BMW Group Com
on their own initiative, verify compliance with the law pliance Contact serves as a further point of contact for
and communicate regularly with staff on this issue. both employees and non-employees for any questions
Any indication of non-compliance with the law must regarding compliance.
be rigorously investigated.
Employees also have the opportunity to submit informa
More than 25,400 managers and staff worldwide have re tion – anonymously and confidentially – via the BMW
ceived training in essential compliance matters since the Group SpeakUP Line about possible breaches of the law
introduction of the BMW Group Compliance Manage within the company. The BMW Group SpeakUP Line
ment System. The training material is available on an In is available in a total of 34 languages and can be reached
ternet-based training platform in German and English via local toll-free numbers in all countries in which BMW
and includes a final test. Successful completion of the Group employees are engaged in activities.
training programme, which is documented by a certificate,
is mandatory for all BMW Group managers. Appropriate Compliance-related queries and concerns are docu
170 STATEMENT ON
CORPORATE GOVERNANCE processes are in place to ensure that all newly recruited mented and followed up by the BMW Group Compliance
managers and promoted staff undergo compliance train Committee Office using an electronic Case Management
Governing Constitution ing. In this way, the BMW Group ensures full training System. If necessary, Corporate Audit, Corporate
coverage for its managers in compliance matters. Security, the Works Council and legal departments may
Supervisory Board pursuant to be called upon to assist in the investigation process.
§ 161 AktG
In addition to this basic training, more in-depth training
Management is also provided to certain groups of staff on specific Through the group-wide reporting system, Compliance
Board compliance issues. In 2014, a total of 1,900 employees at Responsibles throughout the BMW Group report on
176 Work Procedures of the BMW AG branches received further training as anti- compliance-relevant issues to the Compliance Commit
178 Work Procedures of the money laundering measures were upgraded. Antitrust tee on a regular basis, and, if necessary, on an ad hoc
Supervisory Board law training was also expanded in 2013, targeting em basis. This includes reporting on the compliance status
Governance Practices ployees who come into contact with antitrust-related of the relevant entities, on identified legal risks and
issues as a result of their functions within sales and incidences of non-compliance, as well as on corrective /
marketing, purchasing, production or development. A preventative measures implemented.
Compliance with and implementation of the Legal Com evaluated with a view to identifying potential compliance
pliance Code are audited regularly by Corporate Audit risks. These procedures are particularly relevant for
and subjected to control checks by Corporate Security relations with sales partners and service providers, such
and the BMW Group Compliance Committee Office. As as agencies and consultants. Depending on the results
part of its regular activities, Corporate Audit carries out of the evaluation, appropriate measures – such as com
on-site audits. The BMW Group Compliance Committee munication measures, training and possible monitoring –
also engages Corporate Audit to perform compliance- are implemented to manage compliance risks. The
specific checks. In addition, a BMW Group Compliance Business Relations Compliance programme has already
Spot Check, a sample test specifically designed to identify been i ntroduced in 32 units since its launch and, over
potential corruption risks, was carried out in 2014. Com the coming years, will be rolled out successively through
pliance control activities are coordinated by the BMW out the BMW Group’s worldwide sales organisation.
Group Panel Compliance Controls. Any necessary follow- In 2014, the company also continued integrating com
up measures are organised by the BMW Group Com pliance clauses to protect contractual relationships into
pliance Committee Office. dealer and importer contracts.
It is essential that employees are aware of and comply Compliance is also an important factor in safeguarding
with applicable legal regulations. The BMW Group the future of the BMW Group workforce. With this in
does not tolerate violations of the law by its employees. mind, the Board of Management and the national and
Culpable violations of the law result in employment- international employee representative bodies of the
contract sanctions and may involve personal liability con BMW Group have agreed on a binding set of Joint Prin
sequences for the employee involved. ciples for Lawful Conduct. In doing so, all parties in
volved made a commitment to the principles contained
To avoid this, BMW Group employees are kept fully up- in the BMW Group Legal Compliance Code and to
to-date with the instruments and measures used by the trustful cooperation in all matters relating to compliance.
Compliance Management System via various internal Employee representatives are therefore regularly in
channels. As of 2014, all new staff receive a welcome volved in the process of refining compliance measures
email underscoring the BMW Group’s special commit within the BMW Group.
ment to compliance when they join the company. The
central means of communication is the Compliance In the interest of investor protection and to ensure that
website within the BMW Group’s intranet, where em the BMW Group complies with regulations relating
ployees can find compliance-related information and to potential insider information, the Board of Manage
access training materials in both German and English. ment appointed an Ad Hoc Committee back in 1994,
The website contains a special service area where various consisting of representatives of various specialist de
practical tools are made available to employees to help partments, whose members examine the relevance of
them deal with typical compliance-related matters. BMW issues for ad hoc disclosure purposes. All persons
Group employees also have access on the website to an working on behalf of the company who have access to
electronically supported approval process for invitations insider information in accordance with existing rules
in connection with business partners and an evaluation have been, and continue to be, included in a corre
tool for independent assessment of the admissibility of sponding, regularly updated list and informed of the
incentive schemes to promote sales. duties arising from insider rules.
In the same way that the BMW Group is committed to

lawful and responsible conduct, it expects no less
from its business partners. In 2012, the BMW Group
developed a new Business Relations Compliance pro
gramme aimed at ensuring the reliability of its business
relations. Relevant business partners are checked and
188
Reportable securities transactions and to hold the shares so acquired for four years. In re
(“Directors Dealings”) turn for this commitment, BMW AG pays 100 % of the
Pursuant to § 15 a of the German Securities Trading Act investment amount as a net subsidy. Once the four-year
(WpHG), members of the Board of Management and holding period requirement has been fulfilled, the par
the Supervisory Board and any persons related to those ticipants receive – for each three common stock shares
members are required to give notice to BMW AG and held and at the Company’s option – one further share
the Federal Agency for the Supervision of Financial Ser of common stock or the equivalent amount in cash.
vices of transactions with BMW stock or related finan
cial instruments if the total sum of such transactions Under the terms of the Employee Share Programme, em
equals or exceeds an amount of € 5,000 during any given ployees were able in 2014 to acquire packages of be
calendar year. No securities transactions pursuant to tween four and ten shares of non-voting preferred stock
§ 15 a WpHG were notified to the Company during the with a discount in each case of € 25 (2013: € 19.23) per
financial year 2014. share compared to the market price (average closing
price in Xetra trading during the period from 6 Novem
Shareholdings of members of the Board of Management ber to 12 November 2014: € 62.08). All employees of
and the Supervisory Board BMW AG and its – directly or indirectly – wholly owned
The members of the Supervisory Board of BMW AG German subsidiaries (if agreed to by the directors of
hold in total 27.61 % of the Company’s shares of com those entities) were entitled to participate in the scheme.
mon and preferred stock (2013: 27.62 %), of which Employees were required to have been in an uninter
16.06 % (2013: 16.07 %) relates to Stefan Quandt, Ger rupted employment relationship with BMW AG or the
many, and 11.54 % (2013: 11.55 %) to Susanne Klatten, relevant subsidiary for at least one year at the date on
Germany. The shareholdings of the members of the which the allocation for the year was announced. Shares
Board of Management total less than 1 % of the issued of preferred stock acquired in conjunction with the Em
shares. ployee Share Scheme are subject to a vesting period of
four years, starting from 1 January of the year in which
Share-based remuneration schemes for employees the employees acquired the shares. A total of 239,777
and Management Board members (2013: 266,152) shares of preferred stock were acquired
Three share-based remuneration schemes were in place by employees under the scheme in 2014; 239,757 (2013:
at BMW AG during the year under report, namely the 265,570) of these shares were drawn from the Author
Employee Share Programme (under which entitled ised Capital 2014, the remainder were bought back via
employees of BMW AG have been able to participate in the stock exchange. Every year the Board of Manage
the enterprise’s success since 1989 in the form of non- ment of BMW AG decides whether the scheme is to be
voting shares of preferred stock), a share-based remu continued. Further information is provided in notes 20
170 STATEMENT ON
CORPORATE GOVERNANCE neration scheme for Board of Management members and 35 to the Group Financial Statements.
and a share-based remuneration scheme for department
Governing Constitution heads (relating in both cases to shares of common
stock). The share-based remuneration scheme for Board
Supervisory Board pursuant to of Management members is described in detail in the
§ 161 AktG
Compensation Report (see also the “Share-based re
Management muneration” section in the Compensation Report and
Board note 20 to the Group Financial Statements).
178 Work Procedures of the The share-based remuneration scheme for qualifying
Supervisory Board department heads, introduced with effect for financial
Governance Practices years beginning after 1 January 2012, is closely based
on the scheme for Board of Management members and
is aimed at rewarding a long-term, entrepreneurial ap
proach to running the business on a sustainable basis.
Under the terms of this scheme, participants give a

commitment to invest an amount equivalent to 20 % of
their performance-based bonus in BMW common stock
Compensation Report performance. Targets and other parameters may not be

The following section describes the principles relating changed retrospectively.
to the compensation of the Board of Management and
the stipulations set out in the statutes relating to the The Supervisory Board reviews the appropriateness of
compensation of the Supervisory Board. In addition to the compensation system annually. The Personnel
discussing the compensation system, the components Committee also makes use of remuneration studies. The
of compensation are also disclosed in absolute figures. Supervisory Board reviews the appropriateness of the
Furthermore, the compensation of each member of the compensation system in horizontal terms by comparing
Board of Management and the Supervisory Board for compensation paid by DAX companies and in vertical
the financial year 2014 is disclosed by individual and terms by comparing board compensation with the sala
analysed in its component parts. ries of executive managers and with the average salaries
of employees of BMW AG in Germany, in both cases in
1. Board of Management compensation terms of level and of changes over time. Recommenda
Responsibilities tions made by an independent external remuneration
The Supervisory Board is responsible for determining expert and suggestions made by investors and analysts
and regularly reviewing the Board of Management’s are also considered in the consultative process.
compensation. The Personnel Committee plays a pre
paratory role in this process. Compensation system, compensation components
The compensation of the Board of Management com
Principles of compensation prises both fixed and variable remuneration as well as
The compensation system for the Board of Management a share-based component. Retirement and surviving
at BMW AG is designed to encourage a management dependants’ benefit entitlements are also in place.
approach focused on sustainable development of the
BMW Group. One further principle applied when de Fixed compensation
signing remuneration systems at BMW is that of consist Fixed remuneration consists of a base salary (paid
ency at different levels. In other words, compensation monthly) and other remuneration elements. Other re
systems for the Board of Management, senior manage muneration elements comprise mainly the use of com
ment and employees of BMW AG should all have a simi pany and lease cars as well as the payment of insurance
lar structure and contain similar components. The Super premiums, contributions towards security systems and
visory Board carries out regular checks to ensure that an annual medical check-up. Members of the Board of
all Board of Management compensation components are Management are also entitled to purchase vehicles and
appropriate, both individually and in total, and do not other services of the BMW Group at conditions that also
encourage the Board of Management to take inappro apply in each relevant case for employees.
priate risks on behalf of the BMW Group. At the same
time, the compensation model used for the Board of The basic remuneration of members of the Board of
Management should be attractive in the context of the Management is unchanged from the previous year,
competitive environment for highly qualified executives. namely € 0.75 million p. a. for a board member during
the first period of office, € 0.9 million p. a. for a board
The compensation of members of the Board of Manage member from the second term of appointment or fourth
ment is determined by the full Supervisory Board on year of office onwards and € 1.5 million p. a. for the
the basis of performance criteria and after taking into Chairman of the Board of Management.
account any remuneration received from Group com
panies. The principal performance criteria are the nature Variable remuneration
of the tasks allocated to each member of the Board of The variable remuneration of Board of Management
Management, the economic situation and the perfor members comprises variable cash remuneration on the
mance and future prospects of the BMW Group. The one hand and a share-based remuneration component
Supervisory Board sets demanding and relevant parame on the other.
ters as the basis for variable compensation. It also takes
care to ensure that variable components based on Variable cash remuneration, in particular bonuses
multi-year assessment criteria take account of both posi Variable cash remuneration consists of a cash bonus
tive and negative developments and that the package and share-based remuneration component equivalent to
as a whole encourages a long-term approach to business 20 % of a board member’s total bonus after taxes, which
190
the board member is required to invest in BMW AG The personal performance-related bonus is derived by
common stock. Taxes and social insurance relating to multiplying the target amount set for each member of
the share-based remuneration are also borne by the the Board of Management by a performance factor. The
Company. In substantiated cases, the Supervisory Supervisory Board sets the performance factor on the
Board also has the option of paying an additional spe basis of its assessment of the contribution of the relevant
cial bonus. Board of Management member to sustainable and long-
term oriented business development. In setting the
The bonus is made up of two components, each equally factor, consideration is given equally to personal perfor
weighted, namely a corporate earnings-related bonus mance and decisions taken in previous forecasting pe
and a personal performance-related bonus. The target riods, key decisions affecting the future development
bonus (100 %) for a Board of Management member, of the business and the effectiveness of measures taken
for both components of variable compensation, totals in response to changing external conditions as well as
€ 1.5 million p. a., rising to € 1.75 million p. a. from the other activities aimed at safeguarding the future viability
second term of appointment or fourth year of office on of the business to the extent not included directly in
wards. The equivalent figure for the Chairman of the the basis of measurement. Performance factor criteria
Board of Management is € 3 million p. a. The amount of include innovation (economic and ecological, e. g. re
bonus is capped for all Board of Management members. duction of carbon emissions), customer focus, ability to
With effect from financial years beginning on or after adapt, leadership accomplishments, contributions to
1 January 2014, the upper limits are 200 % of the relevant the Company’s attractiveness as an employer, progress
target bonus (2013: 250 %). in implementing the diversity concept and activities that
foster corporate social responsibility. The target bonus
The corporate earnings-related bonus is based on the and the key figures used to determine the corporate
BMW Group’s net profit and post-tax return on sales earnings-related bonus are fixed in advance for a period
(which are combined in a single earnings factor) and the of three financial years, during which time they may not
level of the dividend (common stock). The corporate be amended retrospectively.
earnings-related bonus is derived by multiplying the tar
get amount fixed for each member of the Board of Share-based remuneration programme
Management by the earnings factor and by the dividend The compensation system includes a share-based remu
factor. In exceptional circumstances, for instance when neration programme, in which the level of share-based
there have been major acquisitions or disposals, the remuneration is based on the amount of the bonus paid.
Supervisory Board may adjust the level of the corporate The system is aimed at creating further long-term incen
earnings-related bonus. tives to encourage sustainable governance.
170 STATEMENT ON
CORPORATE GOVERNANCE An earnings and dividend factor of 1.00 would give rise This programme envisages a share-based remuneration
to an earnings-based bonus of € 0.75 million for the finan component equivalent to 20 % of the board member’s
Governing Constitution cial year 2014 for a member of the Board of Management total bonus after taxes, which the board member is re
during the first period of office and one of € 0.875 mil quired to invest in BMW AG common stock. Taxes and
Supervisory Board pursuant to lion during the second term of appointment or from the social insurance relating to the share-based remunera
§ 161 AktG
fourth year in office. The equivalent bonus for the Chair tion component are also borne by the Company. As a
Management man of the Board of Management is € 1.5 million. The general rule, the shares must be held for a minimum of
Board earnings factor is 1.00 in the event of a Group net profit four years. As part of a matching plan, the Board of
176 Work Procedures of the of € 3.1 billion and a post-tax return on sales of 5.6 %. Management members will, at the end of the holding
178 Work Procedures of the The dividend factor is 1.00 in the event that the dividend period, receive from the Company either one additional
Supervisory Board paid on the shares of common stock is between 101 and share of common stock or an equivalent cash amount
Governance Practices 110 cents. If the Group net profit is below € 1 billion or for three shares of common stock held, to be decided at
if the post-tax return on sales is less than 2 %, the earn the discretion of the Company (share-based remunera
ings factor for the financial year 2014 would be zero. In tion component / matching component), unless the em
this case, no corporate earnings-related bonus would be ployment relationship was ended before expiry of the
paid. Based on the principle of consistency at all levels, agreed contractual period (except if caused by death or
this rule is also applicable in determining the corporate invalidity). Special rules apply in the case of death or
earnings-related variable compensation components of invalidity of a Board of Management member before ful
all managers and staff of BMW AG. filment of the holding period.
Retirement and surviving dependants’ benefits retirement in accordance with a special arrangement.
The provision of retirement and surviving dependants’ In addition, following the death of a retired board
benefits for Board of Management members was changed member who has elected to receive a lifelong pension,
to a defined contribution system with a guaranteed 60 % of that amount is paid as a lifelong widow’s pen
minimum return with effect from 1 January 2010. How sion. Pensions are increased annually by an amount of
ever, given the fact that board members appointed for at least 1 %.
the first time prior to 1 January 2010 had a legal right to
receive the benefits already promised to them, these The amount of the retirement pension to be paid is
board members were given the option to choose between determined on the basis of the amount accrued in each
the previous system and the new one. board member’s individual pension savings account.
The amount on this account arises from annual contri
In the event of the termination of mandate, Board of butions paid in, plus interest earned depending on the
Management members appointed for the first time prior type of investment.
to 1 January 2010 are entitled to receive certain defined
benefits in accordance with the old pension scheme Depending on the length of membership in the Board
rules. Pensions are paid to former members of the Board of Management and previous activities, the annual con
of Management who have either reached the age of 65 tribution to be paid amounts to between € 350,000 and
or, if their mandate was terminated earlier and not ex € 400,000 for each member of the Board of Management
tended, to members who have either reached the age of and € 700,000 for the Chairman of the Board of Manage
60 or who are unable to work due to ill health or accident, ment. The contributions are credited, along with inter
or who have entered into early retirement in accordance est earned, to the personal savings accounts of board
with a special arrangement. The amount of the pension members in monthly amounts. The guaranteed minimum
is unchanged from the previous year and comprises a rate of return p. a. corresponds to the maximum inter
basic monthly amount of € 10,000 or € 15,000 (Chairman est rate used to calculate insurance reserves for life in
of the Board of Management) plus a fixed amount. The surance policies (guaranteed interest on life insurance
fixed amount is made up of approximately € 75 for each policies). A Board of Management member entering of
year of service in the Company before becoming a mem fice at 50 years of age and serving as member of the
ber of the Board of Management and between € 400 and Board of Management to the age of 60 can expect a re
€ 600 for each full year of service on the board (up to a tirement savings capital of € 4.2 million.
maximum of 15 years). Pension payments are adjusted
by analogy to the rules applicable for the adjustment of In the case of invalidity or death, a minimum contribu
civil servants’ pensions: the pensions of members of tion of the potential annual contributions will be paid
the Board of Management are adjusted when the civil until the person concerned would have reached the age
servants remuneration level B6 (excluding allowances) of 60.
is increased by more than 5 % or in accordance with the
Company Pension Act. Contributions falling due under the defined contribution
scheme are paid into an external fund in conjunction
When a mandate is terminated, the new defined contri with a trust model that is also used to fund pension ob
bution system provides entitlements which can be paid ligations to employees.
either (a) in the case of death or invalidity as a one-off
amount or over a maximum of ten years or (b) upon re Income earned on an employed or a self-employed ba
tirement – depending on the wish of the ex-board mem sis up to the age of 63 is offset against the pension entitle
ber concerned – in the form of a lifelong monthly pen ment. In addition, certain circumstances have been
sion, as a one-off amount, in a maximum of ten annual specified, in the event of which the Company no longer
instalments, or in a combined form (e. g. a combination has any obligation to pay benefits. In such cases, no
of a one-off payment and a proportionately reduced transitional payments will be made.
lifelong monthly pension). Pensions are paid to former
members of the Board of Management who have either Board of Management members who retire immediately
reached the statutory retirement age for the state pen after their service on the board and who draw a retire
sion scheme in Germany or, if their mandate had termi ment pension are entitled to purchase vehicles and
nated earlier and had not been extended, to members other services of the BMW Group at conditions that also
who have either reached the age of 60 or are perma apply in each relevant case for pensioners and to lease
nently unable to work, or who have entered into early BMW Group vehicles in accordance with the guidelines
192
Overview of compensation system and compensation components
Component Parameter / measurement base
Basic compensation p. a.

Member of the Board of Management:
– € 0.75 million (first term of appointment)
– € 0.90 million (from second term of appointment onwards or fourth year in office)
Chairman of the Board of Management:
– € 1.50 million
Variable compensation
Bonus Target bonuses p. a. (if target is 100 % achieved):
– € 1.50 million (first term of appointment)
– € 1.75 million (from second term of appointment onwards or fourth year in office)
– € 3.00 million (Chairman of the Board of Management)
a) C
orporate earnings-related bonus – Quantitative criteria fixed in advance for a period of three financial years
(corresponds to 50 % of target bonus if target is 100 % – Formula: 50 % of target bonus x earnings factor x dividend factor (common stock)
achieved) – The earnings factor is derived from the Group net profit and the Group post-tax return
on sales
b) Performance-related bonus – Primarily qualitative criteria, expressed in terms of a performance factor aimed at
(corresponds to 50 % of target bonus if target is 100 % measuring the board members’ contribution to sustainable and long-term performance
achieved) and the future viability of the business
– Formula: 50 % of target bonus x performance factor
– Criteria for the performance factor also include: innovation (economic and ecological,
e. g. reduction of CO2 emissions), customer orientation, ability to adapt, leadership ac-
complishments and attractiveness as employer, progress in implementing the diversity
concept and activities that foster corporate social responsibility
Special bonus payments May be paid in justified circumstances on an appropriate basis, contractual basis, no
entitlement
Share-based remuneration programme – Requirement for Board of Management members to each invest an amount equivalent
to 20 % of their total bonus (after tax) in BMW AG common stock
a) Cash compensation component – Earmarked cash remuneration equivalent to the amount required to be invested in
BMW AG shares, plus taxes and social insurance contributions
b) S
hare-based remuneration component – Once the four-year holding period requirement is fulfilled, Board of Management
(matching component) members receive for each three common stock shares held either – at the Company’s
option – one further share of common stock or the equivalent amount in cash, unless
the employment relationship was ended before expiry of the agreed contractual period
(except where caused by death or invalidity).
Other compensation
Contractual agreement, main points: use of company cars, insurance premiums,
contributions towards security systems, medical check-up
Retirement and surviving dependants’ benefits

Model Principal features
170 STATEMENT ON
a) Defined benefits Pension of € 120,000 (Chairman: € 180,000) p. a. plus fixed amounts based on length of
(only applies to board members appointed for the first Company and board service
time before 1 January 2010; based on legal right to
receive the benefits already promised to them, this group
of persons is entitled to opt between (a) and (b))
§ 161 AktG
b) Defined contribution system with guaranteed minimum Pension based on amounts credited to individual savings accounts for contributions paid
rate of return and interest earned, various forms of disbursement
Management Pension contributions p. a.:
173 Members of the Supervisory Member of the Board of Management: € 350,000 – € 400,000
Board Chairman of the Board of Management: €700,000
Board of M anagement Remuneration caps (maximum remuneration)
178 Work Procedures of the in € p. a. Bonus Share-based compensation programme Possible Total *
Supervisory Board
Cash compensation Monetary value special bonus
for share acquisition of matching
184 Compliance in the BMW Group component
Member of the Board of Management
in the first term of appointment 3,000,000 700,000 700,000 1,000,000 4,925,000
Member of the Board of Management
in the second term of appointment
or from fourth year in office 3,500,000 800,000 800,000 1,200,000 5,500,000
Chairman of the Board of Management 6,000,000 1,400,000 1,400,000 1,500,000 9,850,000
*
Including basic remuneration, other fixed remuneration elements and pension contribution. The overall cap is lower than the sum of the maximum amounts for each of the
individual components.
applicable to senior heads of departments. Retired Chair benefits from third parties in 2014 on account of their
men of the Board of Management are entitled, like s enior activities as members of the Board of Management of
heads of departments, to use a BMW Group vehicle as a BMW AG.
company car and, depending on availability and as part
of an offset arrangement, use the BMW chauffeur services. Remuneration caps
The Supervisory Board has stipulated caps for all variable
Termination benefits on premature termination of board remuneration components and for the remuneration of
activities, benefits paid by third parties Board of Management members in total. The caps are
In conjunction with the amicable early termination of shown in the overview of the compensation system and
Dr Reithofer’s Board of Management mandate with compensation components.
effect from the end of the Annual General Meeting 2015,
the Company also reached agreement with Dr Reithofer Compensation of the Board of Management for the
concerning the early termination of his service contract financial year 2014 (2013) (total)
with effect from the end of the Annual General Meeting The total compensation of the current members of the
2015. The contract termination agreement envisages Board of Management of BMW AG for the financial year
calculation of variable cash remuneration for prorated 2014 amounted to € 35.4 million (2013: € 34.5 million),
activities in the financial year 2015 on the basis of the of which € 7.7 million (2013: € 7.9 million) relates to
target attainment for the financial year 2013, entitling fixed components (including other remuneration).
Dr Reithofer to an amount of € 1.9 million, payable in Variable components amounted to € 27.0 million (2013:
2015, i. e. in the period after he has left the Board of € 25.9 million) and share-based remuneration compo
Management. This arrangement ensures that – in the nents to € 0.7 million (2013: € 0.7 million).
event that Dr Reithofer is elected to the Supervisory
Board – he will not be involved in deciding on the level
of his own performance-related remuneration. As
Amount Proportion Amount Proportion
settlement of the remuneration to which he is entitled in % in %
on the basis of the original term of his service con
tract (i. e. up to 2016), the Company agreed to pay an Fixed compensation 7.7 21.8 7.9 22.9
amount of € 2.5 million to Dr Reithofer in 2015. The Variable cash
Company will make a final pension contribution of compensation 27.0 76.3 25.9 75.1
€ 0.7 million on behalf of Dr Reithofer for the financial Share-based compen-
year 2015. sation component* 0.7 1.9 0.7 2.0
Total compensation 35.4 100.0 34.5 100.0
After leaving the Board of Management on 9 December *

atching component; provisional number or provisional monetary value calculated at
M
2014, an agreement was reached with Dr Diess for the grant date (date on which the entitlement became binding in law). The final number
early termination of his service contract with effect from of matching shares is determined in each case when the requirement to invest in
BMW AG common stock has been fulfilled.
30 June 2015. The agreement envisages the continued
payment of fixed remuneration amounting to € 0.5 mil
lion for the period from the termination of Dr Diess’ In addition, an expense of € 2.1 million (2013: € 2.2 mil
mandate to the expiry of the service contract. As settle lion) was recognised in the financial year 2014 for current
ment of the variable cash remuneration relating to members of the Board of Management for the period af
the remainder of the contractual period, a payment of ter the end of their service relationship, which relates to
€ 0.6 million, payable in 2015, was also agreed. A per the expense for allocations to pension provisions.
formance-related bonus is no longer payable for this
period. The Company will make a final pension contri The amount paid to former members of the Board of
bution of € 0.4 million on behalf of Dr Diess for the finan Management and their dependants for the financial year
cial year 2014. 2014 was € 5.8 million (2013: € 4.7 million). The figure for
2014 includes continued payment of the fixed remunera
Apart from these, there are no contractual commitments tion of Dr Diess after leaving the Board of Management
to pay compensation if a board member’s mandate is amounting to € 0.1 million. Pension obligations to former
terminated early. Similarly, there are no commitments members of the Board of Management, including Dr
to pay compensation for early termination in the event Diess, and their surviving dependants are fully covered
of a change of control or a takeover offer. No members by pension provisions amounting to € 68.4 million (2013:
of the Board of Management received any payments or € 58.0 million), computed in accordance with IAS 19.
194
Compensation of the individual members of the Board of Management for the financial year 2014 (2013)
in € or Fixed compensation Variable Share-based Com- Expense for Provision at

number of cash com- compensation pensation share-based 31.12. 2014 for
matching shares Basic Other pensation component Total compensation share-based
compen- compen- Total (matching component compensation
sation sation component)1 in year under component in
report in accordance
Number Monetary accordance with with HGB
value HGB and IFRS and IFRS2
Norbert Reithofer 1,500,000 30,152 1,530,152 5,563,800 1,810 151,207 7,245,159 191,845 411,815
(1,500,000) (119,232) (1,619,232) (5,270,400) (1,886) (143,204) (7,032,836) (122,700) (219,970)
Milagros Caiña 750,000 68,555 818,555 2,781,900 971 81,117 3,681,572 103,493 159,210
Carreiro-Andree (750,000) (98,213) (848,213) (2,635,200) (1,012) (76,841) (3,560,254) (49,469) (55,717)
Herbert Diess3 844,355 20,580 864,935 2,749,360 – – 3,614,295 92,633 254,686
(900,000) (19,210) (919,210) (3,074,400) (1,181) (89,673) (4,083,283) (91,437) (162,052)
Klaus Draeger 900,000 24,790 924,790 3,245,550 1,133 94,651 4,264,991 191,814 407,415
(900,000) (26,374) (926,374) (3,074,400) (1,181) (89,673) (4,090,447) (125,097) (215,602)
Friedrich Eichiner 900,000 21,952 921,952 3,245,550 1,133 94,651 4,262,153 181,389 363,844
(900,000) (24,225) (924,225) (3,074,400) (1,181) (89,673) (4,088,298) (104,017) (182,455)
Klaus Fröhlich4 46,371 394 46,765 172,000 52 4,623 223,388 130 130
(–) (–) (–) (–) (–) (–) (–) (–) (–)
Harald Krüger 900,000 18,071 918,071 3,245,550 1,055 88,135 4,251,756 94,542 202,917
(900,000) (18,588) (918,588) (3,074,400) (1,100) (83,523) (4,076,511) (60,843) (108,375)
Ian Robertson 900,000 14,161 914,161 3,245,550 1,133 94,651 4,254,362 125,621 266,831
(900,000) (14,401) (914,401) (3,074,400) (1,181) (89,673) (4,078,474) (79,152) (141,210)
Peter 750,000 26,481 776,481 2,781,900 971 81,117 3,639,498 31,055 41,435
Schwarzenbauer (562,500) (13,424) (575,924) (1,976,400) (812) (57,603) (2,609,927) (10,380) (10,380)
Total 5 7,490,726 225,136 7,715,862 27,031,160 8,258 690,152 35,437,174 1,012,523 2,108,284
(7,537,500) (344,101) (7,881,601) (25,894,500) (9,534) (719,863) (34,495,964) (712,103) (1,253,625)
1
rovisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is
P
determined in each case when the requirement to invest in BMW AG common stock has been fulfilled. See note 20 to the Group Financial Statements for a description of the
accounting treatment of the share-based compensation component.
2
Monetary value calculated on the basis of the closing price of BMW common stock in the XETRA trading system on 30 December 2014 (€ 89.77) (fair value at reporting date).
3
Member of the Board of Management until 9 December 2014.
4
Member of the Board of Management since 9 December 2014.
5
Figures for the previous year include the remuneration of the member of the Board of Management who left office during the financial year 2013.
170 STATEMENT ON
§ 161 AktG
Management
Board
Supervisory Board
Pension benefits of the individual members of the Board of Management
in € Service cost Service cost Present value of Present value of

in accordance with IFRS in accordance with HGB pension obligations pension obligations
for the financial year 20141 for the financial year 20141 (defined benefit plans), (defined benefit plans),
in accordance in accordance
with IFRS 2 with HGB 2
Norbert Reithofer 281,278 717,656 9,600,845 7,346,081

(313,038) (233,100) (7,234,887) (6,036,606)
Milagros Caiña Carreiro-Andree 366,848 368,968 990,507 989,277
(369,827) (372,277) (555,874) (555,190)
Klaus Draeger 147,483 409,663 5,359,750 4,485,792
(162,426) (407,482) (4,086,628) (3,694,976)
Friedrich Eichiner 177,335 409,663 5,599,794 4,633,694
(174,279) (407,482) (4,683,637) (3,827,095)
Klaus Fröhlich 3 3,643 2,747 2,138,633 1,286,247
(–) (–) (–) (–)
Harald Krüger 220,609 359,256 3,927,671 3,204,346
(143,734) (358,325) (2,648,384) (2,516,021)
Ian Robertson 356,067 414,827 3,029,448 2,395,377
(395,507) (274,357) (2,025,994) (1,771,848)
Peter Schwarzenbauer 369,234 371,398 688,271 687,570
(262,500) (262,500) (289,681) (289,308)
Total 4 1,922,497 3,054,178 31,334,919 25,028,384
(2,033,085) (2,723,228) (24,819,665) (21,753,227)
Herbert Diess 5 178,809 383,900 4,256,732 3,858,064

(211,774) (407,705) (3,294,607) (3,062,183)
1
Service cost differs due to the different valuation bases used to measure pension obligations for HGB purposes (expected settlement amount) and for IFRS purposes
(present value of the defined benefit obligation).
2
Based on legal right to receive the benefits already promised to them, Board of Management members appointed for the first time prior to 1 January 2010 were given
the option of choosing between the old and new models at the time the Company changed from a defined benefit to a defined contribution system.
3
Member of the Board of Management since 9 December 2014.
4
The previous year’s figures include amounts relating to Dr Diess.
5
Member of the Board of Management until 9 December 2014.
2. Supervisory Board compensation Compensation principles, compensation components

Responsibilities, regulation pursuant to Articles The Supervisory Board of BMW AG receives a fixed
of Incorporation compensation component as well as a corporate per
The compensation of the Supervisory Board is specified formance-related compensation component which is
by resolution of the shareholders at the Annual General oriented toward sustainable growth, based on a multi-
Meeting or in the Articles of Incorporation. The com year assessment. The corporate performance-related
pensation regulation valid for the financial year under component is based on average earnings per share of
report was resolved by shareholders at the Annual Gen common stock for the remuneration year and the two
eral Meeting on 14 May 2013 and is set out in Article 15 preceding financial years.
of BMW AG’s Articles of Incorporation, which can be
viewed and / or downloaded at www.bmwgroup.com / ir These two interacting components are intended to
under the menu items “Corporate Facts” and “Corporate ensure that the compensation of Supervisory Board
Governance”. members is commensurate overall in relation to the
196
tasks performed and the Company’s financial condition amount and each member of a committee receives one
and also takes account of business performance over and a half times the amount of the remuneration of a
several years. Supervisory Board member. If a member of the Super
visory Board exercises more than one of the functions
In accordance with the Articles of Incorporation, each referred to above, the compensation is measured only
member of BMW AG’s Supervisory Board receives, in on the basis of the function which is remunerated with
addition to the reimbursement of reasonable expenses, the highest amount.
a fixed amount of € 70,000 (payable at the end of the
year) as well as a corporate performance-related compen In addition, each member of the Supervisory Board re
sation of € 170 for each full € 0.01 by which the average ceives an attendance fee of € 2,000 for each full meeting
amount of (undiluted) earnings per share (EPS) of of the Supervisory Board (Plenum) which the member
common stock reported in the Group Financial State has attended (payable at the end of the financial year).
ments for the remuneration year and the two preceding Attendance at more than one meeting on the same day
financial years exceeds a minimum amount of € 2.00 is not remunerated separately.
(payable after the Annual General Meeting held in
the following year). An upper limit corresponding to The Company also reimburses to each member of the
twice the amount of the fixed compensation (€ 140,000) Supervisory Board reasonable expenses and any value-
is in place for the corporate performance-related com added tax arising on the member’s remuneration. The
pensation. amounts disclosed below are net amounts.
With this combination of fixed compensation elements In order to be able to perform his duties, the Chairman
and a corporate performance-related compensation of the Supervisory Board is provided with secretariat
component oriented toward sustainable growth, the and chauffeur services.
compensation structure in place for BMW AG’s Super
visory Board complies with the recommendation on Compensation of the Supervisory Board for the
supervisory board compensation contained in section financial year 2014 (total)
5.4.6 paragraph 2 sentence 2 of the German Corporate In accordance with § 15 of the Articles of Incorporation,
Governance Code (version dated 24 June 2014). the compensation of the Supervisory Board for activities
during the financial year 2014 amounted to € 4.8 million
The German Corporate Governance Code also recom (2013: € 4.6 million). This includes fixed compensation
mends in section 5.4.6 paragraph 1 sentence 2 that the of € 2.0 million (2013: € 2.0 million) and variable compen
exercising of chair and deputy chair positions in the sation of € 2.8 million (2013: € 2.6 million).
Supervisory Board as well as the chair and membership
170 STATEMENT ON in € million 2014 2013
CORPORATE GOVERNANCE of committees should also be considered when deter
Amount Proportion Amount Proportion
mining the level of compensation. in % in %
Accordingly, the Articles of Incorporation of BMW AG Fixed compensation 2.0 41.7 2.0 43.5
Supervisory Board pursuant to stipulate that the Chairman of the Supervisory Board Variable compensation 2.8 58.3 2.6 56.5
§ 161 AktG
shall receive three times the amount and each Deputy Total compensation 4.8 100.0 4.6 100.0
Management Chairman shall receive twice the amount of the remu
Board neration of a Supervisory Board member. Provided the
176 Work Procedures of the relevant committee convened for meetings on at least Supervisory Board members did not receive any further
178 Work Procedures of the three days during the financial year, each chairman of compensation or benefits from the BMW Group for
Supervisory Board the Supervisory Board’s committees receives twice the advisory and agency services personally rendered.
Compensation of the individual members of the Supervisory Board for the financial year 2014 (2013)
in € Fixed compensation Attendance fee Variable Total
Joachim Milberg (Chairman) 210,000 10,000 317,730 537,730

(210,000) (10,000) (294,270) (514,270)
Manfred Schoch (Deputy Chairman)1 140,000 10,000 211,820 361,820
(140,000) (10,000) (196,180) (346,180)
Stefan Quandt (Deputy Chairman) 140,000 10,000 211,820 361,820
(140,000) (10,000) (196,180) (346,180)
Stefan Schmid (Deputy Chairman)1 140,000 10,000 211,820 361,820
(140,000) (10,000) (196,180) (346,180)
Karl-Ludwig Kley (Deputy Chairman) 140,000 6,000 211,820 357,820
(140,000) (8,000) (196,180) (344,180)
Christiane Benner1, 2 44,301 8,000 67,028 119,329
(–) (–) (–) (–)
Bertin Eichler1,3 25,890 2,000 39,172 67,062
(70,000) (10,000) (98,090) (178,090)
Franz Haniel 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Reinhard Hüttl 70,000 8,000 105,910 183,910
(70,000) (10,000) (98,090) (178,090)
Henning Kagermann 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Susanne Klatten 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Renate Köcher 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Ulrich Kranz 2 44,301 8,000 67,028 119,329
(–) (–) (–) (–)
Robert W. Lane 70,000 8,000 105,910 183,910
(70,000) (10,000) (98,090) (178,090)
Horst Lischka1 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Willibald Löw1 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Wolfgang Mayrhuber 70,000 8,000 105,910 183,910
(70,000) (8,000) (98,090) (176,090)
Dominique Mohabeer1 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Brigitte Rödig1 70,000 10,000 105,910 185,910
(33,370) (6,000) (46,761) (86,131)
Markus Schramm 3 25,890 2,000 39,172 67,062
(52,740) (8,000) (73,903) (134,643)
Jürgen Wechsler1 70,000 10,000 105,910 185,910
(70,000) (6,000) (98,090) (174,090)
Werner Zierer1 70,000 10,000 105,910 185,910
(70,000) (10,000) (98,090) (178,090)
Total 4 1,820,382 190,000 2,754,240 4,764,622
(1,818,082) (192,000) (2,547,653) (4,557,735)
1
These employee representatives have – in line with the guidelines of the Deutsche Gewerkschaftsbund – requested that their remuneration be paid into the
Hans Böckler Foundation.
2
Member of the Supervisory Board since 15. 05. 2014.
3
Member of the Supervisory Board until 15. 05. 2014.
4
Figures for the previous year include the remuneration of members of the Supervisory Board who left office during the financial year 2013.
3. Other granted by the Company to members of the Board of

Apart from vehicle lease contracts entered into on cus Management and the Supervisory Board, nor were any
tomary market conditions, no advances and loans were contingent liabilities entered into on their behalf.
198
Responsibility Statement by the Company’s Legal Representatives
Statement pursuant to § 37 y No. 1 of the Securities

Trading Act (WpHG) in conjunction with § 297 (2)
sentence 4 and § 315 (1) sentence 6 of the German
Commercial Code (HGB)
“To the best of our knowledge, and in accordance with
the applicable reporting principles, the Consolidated
Financial Statements give a true and fair view of the
assets, liabilities, financial position and profit of the
Group, and the Group Management Report includes
a fair review of the development and performance of
the business and the position of the Group, together
with a description of the principal opportunities and
risks associated with the expected development of the
Group.”
Munich, 19 February 2015

Aktiengesellschaft
The Board of Management
Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer
Milagros Caiña Carreiro-Andree Dr.-Ing. Klaus Draeger

170 STATEMENT ON
Management and of the Dr. Friedrich Eichiner Klaus Fröhlich
§ 161 AktG
Management
Board
Board of M anagement Harald Krüger Dr. Ian Robertson (HonDSc)
Supervisory Board
Peter Schwarzenbauer
BMW Group
Auditor’s Report
We have audited the consolidated financial statements the business activities and the economic and legal
prepared by Bayerische Motoren Werke Aktiengesell e nvironment of the Group and expectations as to possi
schaft, comprising the income statement for group and ble misstatements are taken into account in the deter
statement of comprehensive income for group, the mination of audit procedures. The effectiveness of the
balance sheet for group, cash flow statement for group, accounting-related internal control system and the evi
group statement of changes in equity and the notes to dence supporting the disclosures in the consolidated
the group financial statements and its report on the financial statements and in the group management
position of the Company and the Group for the business report are examined primarily on a test basis within the
year from 1 January to 31 December 2014. The prepara framework of the audit. The a udit also includes assess
tion of the consolidated financial statements and group ing the annual financial statements of those entities
management report in accordance with IFRSs, as included in consolidation, the determination of entities
adopted by the EU, and the additional requirements of to be included in consolidation, the accounting and
German commercial law pursuant to § 315 a (1) HGB consolidation principles used and significant estimates
(Handelsgesetzbuch “German Commercial Code”) are made by the management, as well as evaluating the
the responsibility of the parent company’s management. overall presentation of the consolidated financial state
Our responsibility is to express an opinion on the con ments and group management report. We believe that
solidated financial statements and on the group manage our audit provides a reasonable basis for our opinion.
ment report based on our audit.
Our audit has not led to any reservations.
We conducted our audit of the consolidated financial
statements in accordance with § 317 HGB and German In our opinion, based on the findings of our audit, the
generally accepted standards for the audit of financial consolidated financial statements comply with IFRSs,
statements promulgated by the Institut der Wirtschafts as adopted by the EU, the additional requirements of
prüfer (Institute of Public Auditors in Germany) (IDW). German commercial law pursuant to § 315 a (1) HGB and
Those standards require that we plan and perform the give a true and fair view of the net assets, financial
audit such that misstatements m aterially affecting the position and results of operations of the Group in ac
presentation of the net assets, financial position and cordance with these requirements. The group manage
results of operations in the consolidated financial state ment report is consistent with the consolidated finan
ments in accordance with the applicable financial report cial statements and as a whole provides a suitable
ing framework and in the group management report view of the Group’s position and suitably presents the
are detected with reasonable assurance. Knowledge of opportunities and risks of future development.
Munich, 5 March 2015
KPMG AG
Wirtschaftsprüfungsgesellschaft
Pastor Feege
Wirtschaftsprüfer Wirtschaftsprüfer
200
OTHER INFORMATION
BMW Group Ten-year Comparison
2014 2013 2012 2011
Sales volume
Automobiles units 2,117,965 1,963,798 1,845,186 1,668,982
Motorcycles 1 units 123,495 115,215 106,358 104,286
Production volume
Automobiles units 2,165,566 2,006,366 1,861,826 1,738,160
Motorcycles 1 units 133,615 110,127 113,811 110,360
Financial Services
Contract portfolio contracts 4,359,572 4,130,002 3,846,364 3,592,093
Business volume (based on balance sheet carrying amounts) 2 € million 96,390 84,347 80,974 75,245
Income Statement
Revenues € million 80,401 76,059 3 76,848 68,821
4
Gross profit margin Group % 21.2 20.1 20.2 21.1
Profit before financial result € million 9,118 7,978 3 8,275 8,018
Profit before tax € million 8,707 7,893 3 7,803 7,383
Return on sales (earnings before tax / revenues) % 10.8 10.4 10.2 10.7
Income taxes € million 2,890 2,564 3 2,692 2,476
Effective tax rate % 33.2 32.5 34.5 33.5
Net profit for the year € million 5,817 5,329 3 5,111 4,907
Balance Sheet
Non-current assets € million 97,959 86,193 3 81,305 74,425
Current assets € million 56,844 52,184 3 50,530 49,004
Equity € million 37,437 35,600 3 30,606 27,103
Equity ratio Group % 24.2 25.7 3 23.2 22.0
Non-current provisions and liabilities € million 58,288 51,643 3 52,834 49,113
Current provisions and liabilities € million 59,078 51,134 3 48,395 47,213
Balance sheet total € million 154,803 138,377 3 131,835 123,429
Cash Flow Statement

Cash and cash equivalents at balance sheet date € million 7,688 7,671 3 8,370 7,776
5
Operating cash flow € million 9,423 9,964 3 9,167 8,110
Capital expenditure € million 6,100 6,711 3 5,240 3,692
Capital expenditure ratio (capital expenditure / revenues) % 7.6 8.8 6.8 5.4
Personnel
Workforce at the end of year 6 116,324 110,351 105,876 100,306
Personnel cost per employee € 92,337 89,869 3 89,161 84,887
Dividend
Dividend total € million 1,904 1,707 1,640 1,508
Dividend per share of common stock / preferred stock € 2.90 / 2.92 2.60 / 2.62 2.50 /2.52 2.30 / 2.32
1
Excluding Husqvarna, sales volume up to 2013: 59,776 units; production up to 2013: 59,426 units.
2
Amount computed on the basis of balance sheet figures: until 2007 from the Group balance sheet, from 2008 onwards from the Financial Services segment balance sheet.
3
4
Research and development expenses included in cost of sales with the effect from 2008.
5
200 OTHER INFORMATION Figures are reported in the cash flow statement up to 2006 as cash inflow from operating activities of Industrial Operations and from 2007 as cash inflow from
200 BMW Group Ten-year Comparison operating activities of the Automotive segment.
6
202 BMW Group Locations Figures exclude dormant employment contracts, employees in the non-work phases of pre-retirement part-time arrangements and low wage earners.
204 Glossary
206 Index
207 Index of Graphs
209 Contacts
201 Other Information
2010 2009 2008 2007 2006 2005
Sales volume
1,461,166 1,286,310 1,435,876 1,500,678 1,373,970 1,327,992 Automobiles
98,047 87,306 101,685 102,467 100,064 97,474 Motorcycles 1
Production volume
1,481,253 1,258,417 1,439,918 1,541,503 1,366,838 1,323,119 Automobiles
99,236 82,631 104,220 104,396 103,759 92,012 Motorcycles 1
Financial Services
3,190,353 3,085,946 3,031,935 2,629,949 2,270,528 2,087,368 Contract portfolio
66,233 61,202 60,653 51,257 44,010 40,428 Business volume (based on balance sheet carrying amounts) 2
Income Statement
60,477 50,681 53,197 56,018 48,999 46,656 Revenues
18.1 10.5 11.4 21.8 23.1 22.9 Gross profit margin Group 4
5,111 289 921 4,212 4,050 3,793 Profit before financial result
4,853 413 351 3,873 4,124 3,287 Profit before tax
8.0 0.8 0.7 6.9 8.4 7.0 Return on sales (earnings before tax / revenues)
1,610 203 21 739 1,250 1,048 Income taxes
33.1 49.2 6.0 19.1 30.3 31.9 Effective tax rate
3,243 210 330 3,134 2,874 2,239 Net profit for the year
Balance Sheet
67,013 62,009 62,416 56,619 50,514 47,556 Non-current assets
43,151 39,944 38,670 32,378 28,543 27,010 Current assets
23,930 19,915 20,273 21,744 19,130 16,973 Equity
21.7 19.5 20.1 24.4 24.2 22.8 Equity ratio Group
46,100 45,119 41,526 33,469 31,372 29,509 Non-current provisions and liabilities
40,134 36,919 39,287 33,784 28,555 28,084 Current provisions and liabilities
110,164 101,953 101,086 88,997 79,057 74,566 Balance sheet total
Cash Flow Statement

7,432 7,767 7,454 2,393 1,336 1,621 Cash and cash equivalents at balance sheet date
8,149 4,921 4,471 6,246 5,373 6,184 Operating cash flow 5
3,263 3,471 4,204 4,267 4,313 3,993 Capital expenditure
5.4 6.8 7.9 7.6 8.8 8.6 Capital expenditure ratio (capital expenditure / revenues)
Personnel
95,453 96,230 100,041 107,539 106,575 105,798 Workforce at the end of year 6
83,141 72,349 75,612 76,704 76,621 75,238 Personnel cost per employee
Dividend
852 197 197 694 458 419 Dividend total
1.30 / 1.32 0.30 / 0.32 0.30 / 0.32 1.06 / 1.08 0.70 / 0.72 0.64 / 0.66 Dividend per share of common stock / preferred stock
202
BMW Group
Locations
The BMW Group is present in the world markets with — H Headquarters
30 production and assembly plants, 42 sales subsidiaries — R Research and Development
and a research and development network.
BMW Group Research and Innovation Centre (FIZ),
Munich, Germany
BMW Group Research and Technology, Munich,
Germany
BMW Car IT, Munich, Germany
BMW Innovation and Technology Centre, Landshut,
Germany
BMW Diesel Competence Centre, Steyr, Austria
BMW Group Designworks, Newbury Park, USA
BMW Group Technology Office USA, Mountain View,
200 OTHER INFORMATION USA
200 BMW Group Ten-year Comparison BMW Group Engineering and Emission Test Center,
202 BMW Group Locations Oxnard, USA
204 Glossary
BMW Group ConnectedDrive Lab China, Shanghai,
206 Index
and BMW Group Designworks Studio Shanghai, China
207 Index of Graphs
BMW Group Engineering China, Beijing, China
209 Contacts BMW Group Engineering Japan, Tokyo, Japan
BMW Group Engineering USA, Woodcliff Lake, USA
— P Production — C Contract production — S Sales subsidiary markets / Locations Financial Services

Berlin plant Magna Steyr Fahrzeugtechnik, Austria Argentina Ireland South Korea
Dingolfing plant VDL Nedcar, Netherlands Australia Italy Spain
Eisenach plant Austria Japan Sweden
Goodwood plant, GB (headquarters of Belgium Luxembourg Switzerland
Rolls-Royce Motor Cars Limited) — A Assembly plants Brazil Malaysia Thailand
Hams Hall plant, GB Bulgaria* Malta* USA
Landshut plant CKD production Araquari, Brazil China Mexico
Leipzig plant CKD production Cairo, Egypt Canada Netherlands
Munich plant CKD production Chennai, India Czech Republic * New Zealand
Oxford plant, GB CKD production Jakarta, Indonesia Denmark Norway
Regensburg plant CKD production Kaliningrad, Russia Finland Poland
Rosslyn plant, South Africa CKD production Kulim, M
alaysia France Portugal
BMW Brilliance Automotive Ltd., Shenyang, CKD production Manaus, Brazil Germany Romania*
China (joint venture with Brilliance China CKD production Rayong, Thailand Great Britain Russia
Automotive Holdings – 3 plants) Greece Singapore
Spartanburg plant, USA Hungary* Slovakia*
Steyr plant, Austria India Slovenia*
*
Swindon plant, GB Indonesia* South Africa Sales locations only.
Wackersdorf plant
BMW – SGL joint venture (2 plants)

204
Glossary
CFRP DJSI World

Abbreviation for carbon-fibre reinforced polymer. CFRP Abbreviation for “Dow Jones Sustainability Index World”.
is a composite material, consisting of carbon-fibres sur A family of indexes created by Dow Jones and the Swiss
rounded by a plastic matrix (resin). On a comparative investment agency SAM Sustainability Group for com
basis, CFRP is approximately 50 % lighter than steel and panies with strategies based on a sustainability concept.
30 % lighter than aluminium. The BMW Group has been one of the leading companies
in the DJSI since 1999.
Combined heat and power
Combined heat and power (CHP) or cogeneration is EBIT
the simultaneous conversion of energy sources into Abbreviation for “Earnings Before Interest and Taxes”.
electricity and useful heating. In comparison to separate The profit before income taxes, minority interest and
generation of electricity in conventional power plants, financial result.
energy is converted more efficiently and with greater
flexibility. As a result, this technology helps to reduce EBITDA
CO2 emissions. Abbreviation for “Earnings Before Interest, Taxes, Depre
ciation and Amortisation”. The profit before income
Common stock t axes, minority interest, financial result and depreciation /
Stock with voting rights (cf. preferred stock). amortisation.
Connected Drive Effectiveness

Under the term Connected Drive, the BMW Group The degree to which offsetting changes in fair value or
already unites a unique portfolio of innovative features cash flows attributable to a hedged risk are achieved by
that enhance comfort, raise infotainment to new levels the hedging instrument.
and significantly boost safety in BMW Group vehicles.
Efficient Dynamics
Cost of materials The aim of Efficient Dynamics is to reduce consumption
Comprises all expenditure to purchase raw materials and emissions whilst simultaneously increasing dynamics
and supplies. and performance. This involves a holistic approach to
achieving optimum automobile potential, ranging from
DAX efficient engine technologies and lightweight construc
Abbreviation for “Deutscher Aktienindex”, the German tion to comprehensive energy and heat management
Stock Index. The index is based on the weighted market inside the vehicle.
prices of the 30 largest German stock corporations (by stock
market capitalisation). Equity ratio
The proportion of equity (= subscribed capital, reserves,
Deferred taxes accumulated other equity and minority interest) to the
Accounting for deferred taxes is a method of allocating balance sheet total.
tax expense to the appropriate accounting period.
Free cash flow
Derivatives Free cash flow corresponds to the cash inflow from oper
Financial products, whose measurement is derived ating activities of the Automotive segment less the cash
principally from market price, market price fluctuations outflow for investing activities of the Automotive seg
and expected market price changes of the underlying ment adjusted for net investments in marketable securities
instrument (e. g. indices, stocks or bonds). and term deposits.
Gross margin
Gross profit as a percentage of revenues.

204 Glossary
206 Index
207 Index of Graphs
209 Contacts
IFRSs Subsidiaries
International Financial Reporting Standards, intended Subsidiaries are those enterprises which, either directly
to ensure global comparability of financial reporting or indirectly, are under the uniform control of the
and consistent presentation of financial statements. management of BMW AG or in which BMW AG, either
The IFRSs are issued by the International Accounting directly or i ndirectly
Standards Board and include the International – holds the majority of the voting rights
Accounting Standards (IASs), which are still valid. – has the right to appoint or remove the majority of the
members of the Board of Management or equivalent
Indicator for water consumption governing body, and in which BMW AG is at the same
The indicators for water consumption refer to the pro time (directly or indirectly) a shareholder
duction sites of the BMW Group. The water consumption – has control (directly or indirectly) over another enter
includes the process water input for the production prise on the basis of a control agreement or a provision
as well as the general water consumption, e. g. for sani in the statutes of that enterprise.
tation facilities.
Supplier relationship management
Operating cash flow Supplier relationship management (SRM) uses focused
Cash inflow from the operating activities of the Auto procurement strategies to organise networked supplier
motive segment. relationships, optimise processes for supplier qualifica
tion and selection, ensure the application of uniform
Preferred stock standards throughout the Group and create efficient
Stock which receives a higher dividend than common sourcing and procurement processes along the whole value
stock, but without voting rights. added chain.
Rating Sustainability
Standardised evaluation of a company’s credit standing Sustainability, or sustainable development, gives equal
which is widely accepted on the global capital markets. consideration to ecological, social and economic develop
Ratings are published by independent rating agencies, ment. In 1987 the United Nations “World Commission
e. g. Standard & Poor’s or Moody’s, based on their analysis on Environment and Development” defined sustainable
of a company. development as development that meets the needs of
the present without compromising the ability of future
Return on sales generations to meet their own needs. The economic
Pre-tax: Profit before tax as a percentage of revenues. relevance of corporate sustainability to the BMW Group
Post-tax: Profit as a percentage of revenues. is evident in three areas: resources, reputation and risk.
Risk management
An integral component of all business processes. Following
enactment of the German Law on Control and Trans
parency within Businesses (KonTraG), all companies
listed on a stock exchange in Germany are required to
set up a risk management system. The purpose of this
system is to identify risks at an early stage which could
have a significant adverse effect on the assets, liabilities,
financial position and results of operations, and which
could endanger the continued existence of the Company.
This applies in particular to transactions involving risk,
errors in accounting or financial reporting and violations
of legal requirements. The Board of Management is
required to set up an appropriate system, to document
that system and monitor it regularly with the aid of the
internal audit department.
206
Index
A G
Accounting policies 101 et seq. Group tangible, intangible and investment
Apprentices 44 assets 124 et seq.
Automotive segment 29 et seq.
I
B Income statement 49, 90 et seq., 116 et seq.
Balance sheet structure 56 Income taxes 50, 63, 106, 118 et seq., 145
Bonds 53 et seq., 145 et seq. Intangible assets 55 et seq., 102, 126
Inventories 106, 132
C Investments accounted for using the equity method
Capital expenditure 4, 50 et seq. and other investments 104, 127 et seq.
Cash and cash equivalents 52 et seq., 106, 134
Cash flow 4, 52 et seq., 94 et seq., 112 et seq., 115, K
161 et seq. Key data per share 88
Cash flow statement 52 et seq., 94 et seq., 161 et seq.
CFRP 32, 39, 41 L
CO2 emissions 3, 27 et seq., 46 et seq., 68 et seq. Lease business 36 et seq.
Compensation Report 189 et seq. Leased products 127
Compliance 184 et seq. Locations 202 et seq.
Connected Drive 39, 42
Consolidated companies 99 et seq. M
Consolidation principles 100 Mandates of members of the Board of
Contingent liabilities 149 Management 172
Corporate Governance 170 et seq. Mandates of members of the Supervisory
Cost of materials 58 et seq. Board 173 et seq.
Cost of sales 49, 101 et seq., 116 Marketable securities 104 et seq., 130 et seq.
Motorcycles segment 35
D
Dealer organisation /dealerships 19, 41 N
Declaration with respect to the Corporate Governance Net profit 4, 49 et seq.
Code 171 New financial reporting rules 109 et seq.
Dividend 88, 121
Dow Jones Sustainability Index World 45 et seq. O
Other financial result 118
E Other investments 128
Earnings per share 49, 102, 121 Other operating income and expenses 117
Efficient Dynamics 38 Other provisions 144
Employees 44 et seq. Outlook 65 et seq.
Equity 57 et seq., 143 et seq.
Exchange rates 23 et seq., 66, 78, 101, 159 et seq. P
Pension provisions 57, 63, 108, 136 et seq.
F Performance indicators 20 et seq., 26 et seq.,
Financial assets 53, 55, 57, 105, 130 et seq. 67 et seq.
Financial instruments 104, 150 et seq. Personnel costs 121
Financial liabilities 55, 57, 107, 145 et seq. Production 31 et seq.
Financial result 50 et seq., 61 Production network 31 et seq.
Financial Services segment 36 et seq. Profit before financial result 4, 49 et seq.
Fleet emissions 3, 27 et seq., 47 et seq., 68 et seq. Profit before tax 4, 26 et seq., 49 et seq., 67, 69
Property, plant and equipment 102 et seq., 126
Purchasing 40 et seq.
204 Glossary
206 Index
207 Index of Graphs
209 Contacts
Index of Graphs
R Finances
Rating 79, 88 et seq., 136 BMW Group in figures 5
Receivables from sales financing 55, 105, 129 et seq. Value drivers 20
Related party relationships 162 et seq. Exchange rates compared to the euro 24
Remuneration system 189 et seq. Oil price trend 24
Report of the Supervisory Board 6 et seq. Steel price trend 24
Research and development 38 et seq. Precious metals price trend 25
Result from equity accounted investments 117 BMW Group new vehicles financed by
Return on sales 20 et seq., 49 et seq. Financial Services segment 36
Revenue reserves 134 et seq. Contract portfolio of Financial Services segment 36
Revenues 4, 27 et seq., 49, 59, 61, 68 et seq., 101, 116 Contract portfolio retail customer financing of
Risks report 70 et seq. Financial Services segment 37
Development of credit loss ratio 37
S Regional mix of purchase volumes 40
Selling and administrative expenses 116 Change in cash and cash equivalents 52
Sales volume 3, 26 et seq., 29, 67 et seq. Financial liabilities 54
Segment information 165 et seq. Balance sheet structure – Automotive segment 56
Shareholdings of members of the Board of Balance sheet structure – Group 56
Management and the Supervisory Board 163 BMW Group value added 59
Statement of Comprehensive Income 90, 123 Risk management in the BMW Group 70
Stock 87 et seq.
Sustainability 45 et seq. Production and sales volume
BMW Group – key automobile markets 29
T BMW Group sales volume by region 29
Tangible, intangible and investment BMW Group – key motorcycle markets 35
assets 102 et seq., 124 et seq. BMW sales volume of motorcycles 35
Trade payables 148
Trade receivables 57, 133 et seq. Workforce
BMW Group apprentices at 31 December 44
Employee attrition rate at BMW AG 45
Proportion of non-tariff female employees 45
Environment
Materiality matrix 46
CO2 emissions per vehicle produced 47
Energy consumed per vehicle produced 47
Process wastewater per vehicle produced 47
Water consumption per vehicle produced 47
Volatile organic compounds per vehicle produced 48
Waste for disposal per vehicle produced 48
Stock
Development of BMW stock 87
Compliance
BMW Group Compliance Management System 185
This version of the Annual Report is a translation

from the German version. Only the original German
version is binding.
208
Financial Calendar
Annual Accounts Press Conference 18 March 2015

Analyst and Investor Conference 19 March 2015
Quarterly Report to 31 March 2015 6 May 2015
Annual General Meeting 13 May 2015
Quarterly Report to 30 June 2015 4 August 2015
Quarterly Report to 30 September 2015 3 November 2015
Annual Report 2015 16 March 2016

Annual Accounts Press Conference 16 March 2016
Analyst and Investor Conference 17 March 2016
Quarterly Report to 31 March 2016 3 May 2016
Annual General Meeting 12 May 2016
Quarterly Report to 30 June 2016 2 August 2016
Quarterly Report to 30 September 2016 4 November 2016

204 Glossary
206 Index
207 Index of Graphs
209 Contacts
Contacts
Business and Finance Press

Telephone + 49 89 382-2 45 44
+ 49 89 382-2 41 18
Fax + 49 89 382-2 44 18
E-mail presse@bmwgroup.com
Investor Relations
Telephone + 49 89 382-2 42 72
+ 49 89 382-2 53 87
Fax + 49 89 382-1 46 61
E-mail ir@bmwgroup.com
The BMW Group on the Internet

Further information about the BMW Group is available online at www.bmwgroup.com.
Investor Relations information is available directly at www.bmwgroup.com/ir. Information
about the various BMW Group brands is available at www.bmw.com, www.mini.com
and www.rolls-roycemotorcars.com.
A FURTHER CONTRIBUTION TOWARDS PRESERVING RESOURCES
The BMW Group Annual Report was printed on paper with the Blue Angel eco-label. The paper used was produced, climate-
neutrally and without optical brighteners and chlorine bleach, from recycled waste paper.
The CO2 emissions generated through print and production were neutralised by the BMW Group. To this end, the corresponding
amount of emissions allowances was erased, with the transaction identification EU241734 on 6 February 2015.
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ANNUAL REPORT

3 BMW GROUP IN FIGURES

6 REPORT OF THE SUPERVISORY BOARD

14 STATEMENT OF THE CHAIRMAN OF THE

18 COMBINED MANAGEMENT REPORT

90 GROUP FINANCIAL STATEMENTS

170 STATEMENT ON CORPORATE GOVERNANCE (§ 289 a HGB)

198 Responsibility Statement by the

199 Auditor’s Report

200 OTHER INFORMATION

BMW Group in figures

2010 2011 2012 2013 2014 Change in %

Principal non-financial performance indicators

Further non-financial key performance figures

Financial Services segment

BMW Group in figures

2010 2011 2012 2013 2014 Change in %

Principal financial performance indicators

Financial Services segment

Further financial key performance figures

Revenues 60,477 68,821 76,848 76,059 1 80,401 5.7

Profit before tax 4,853 7,383 7,803 7,893 1 8,707 10.3

Income taxes – 1,610 – 2,476 – 2,692 – 2,564 1 – 2,890 – 12.7

BMW Group in figures

Sales volume of automobiles* Revenues

Profit before financial result Profit before tax

Dear Shareholders and Shareholder Representatives,

Munich, 12 March 2015

On behalf of the Supervisory Board

COMBINED MANAGEMENT REPORT

General Information on the BMW Group

Average weighted cost

Financial Services segment Capital employed comprises the average amount of

BMW Group 9,051 8,300 5,212 4,661 3,839 3,639

Decisions are taken on the basis of project calculations

The capital value of a project indicates the extent to

The criteria used for taking decisions as well as the long-

Report on Economic Position

Exchange rates compared to the euro

over the course of the year, many emerging market

Oil price trend

Precious metals price trend

Report on Economic Position

Fleet carbon emissions

Revenues Return on capital employed

Financial Services segment

1 Including the joint venture BMW Brilliance Automotive Ltd., S

Report on Economic Position

BMW Group sales volume of vehicles by region and market

1,400 thereof Germany

10 11 12 13 14 

Europe 791.2 858.4 865.4 859.5 914.6

BMW 1 Series 190,033 213,611 – 11.0 10.5

MINI at previous year’s level

Sales volume of MINI vehicles by model variant

MINI Hatch 140,051 128,498 9.0 46.3

More than 4,000 Rolls-Royce sold for the first time

Sales volume of Rolls-Royce vehicles by model variant

Phantom 602 854 – 29.5

Vehicle production of the BMW Group by plant

At Moses Lake2, Washington (USA), the carbon fibre 1

The engine plants in Munich, Hams Hall (UK) and Steyr

Pilot projects for “Industrie 4.0” launched

Principal non-financial performance indicators

Principal financial performance indicators

1 Including the joint venture BMW Brilliance Automotive Ltd., S

10 11 12 13 14

18 COMBINED M ANAGEMENT REPORT

Position and Net Assets

The utilisation of highly efficient, ecologically sustain

18 COMBINED MANAGEMENT REPORT

18 COMBINED MANAGEMENT REPORT 62 % 26 %

18 COMBINED MANAGEMENT REPORT